NOTICE OF ANNUAL MEETING OF

Transcription

NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS 2014
TAKE NOTICE THAT THE ANNUAL MEETING OF THE SHAREHOLDERS
OF COGECO INC. (THE “CORPORATION”) WILL BE HELD AT THE
CENTRE MONT-ROYAL
2200 MANSFIELD STREET
TH
SALON MONT-ROYAL I, 4 FLOOR
MONTRÉAL, QUÉBEC
TH
ON WEDNESDAY, THE 14 DAY OF JANUARY, 2015
AT THE HOUR OF 11:45 IN THE MORNING (MONTRÉAL TIME),
FOR THE FOLLOWING PURPOSES:
1.
TO RECEIVE THE CONSOLIDATED FINANCIAL STATEMENTS OF THE CORPORATION FOR THE YEAR
ENDED AUGUST 31, 2014 AND THE REPORT OF THE AUDITORS THEREON;
2.
TO ELECT EIGHT DIRECTORS;
3.
TO APPOINT AUDITORS AND TO AUTHORIZE THE BOARD OF DIRECTORS TO FIX THEIR
REMUNERATION;
4.
TO CONSIDER AND, IF THOUGHT FIT, APPROVE THE FOLLOWING RESOLUTION:
“THAT, ON AN ADVISORY BASIS AND NOT TO DIMINISH THE ROLE AND RESPONSIBILITIES OF
DIRECTORS, THE SHAREHOLDERS ACCEPT THE BOARD’S APPROACH TO EXECUTIVE
COMPENSATION DISCLOSED IN THE ACCOMPANYING INFORMATION CIRCULAR”;
5.
TO CONSIDER AND, IF THOUGHT FIT, APPROVE OR DISAPPROVE SHAREHOLDER PROPOSALS A-1
AND A-2, WHICH PROPOSALS ARE SET OUT IN SCHEDULE “A” TO THE ACCOMPANYING INFORMATION
CIRCULAR; AND
6.
TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY BE BROUGHT BEFORE THE MEETING.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. WHETHER OR NOT
YOU ARE ABLE TO ATTEND THE ANNUAL MEETING IN PERSON, WE ENCOURAGE YOU TO COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED FORM OF PROXY OR VOTING INSTRUCTION FORM SO THAT
YOUR SHARES CAN BE VOTED AT THE MEETING OR ANY ADJOURNMENT(S) OR POSTPONEMENT(S)
THEREOF IN ACCORDANCE WITH YOUR INSTRUCTIONS.
IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ASSISTANCE IN COMPLETING YOUR PROXY OR VOTING
INSTRUCTION FORM, PLEASE CONTACT THE CORPORATION'S PROXY SOLICITATION AGENT, D.F. KING
CANADA AT 1-800-305-6377 (TOLL FREE IN NORTH AMERICA) OR 1-201-806-7301 (OUTSIDE OF NORTH
AMERICA) OR BY EMAIL AT [email protected].
DATED NOVEMBER 14, 2014
BY ORDER OF THE BOARD,
CHRISTIAN JOLIVET
VICE PRESIDENT, CORPORATE AFFAIRS,
CHIEF LEGAL OFFICER AND SECRETARY
5 PLACE VILLE-MARIE
SUITE 1700
MONTRÉAL, QUÉBEC
H3B 0B3
TO BE COUNTED PROXIES MUST BE RECEIVED NO LATER THAN
5:00 p.m. (EASTERN STANDARD TIME) ON JANUARY 13, 2015.
In order to ensure that your proxy is received in time for COGECO Inc.’s Annual Meeting
to be held on Wednesday, January 14, 2015, we recommend
that you vote in any of the following ways:
VOTING METHOD
BENEFICIAL SHAREHOLDERS
If your shares are held with a broker, bank
or other intermediary
REGISTERED
SHAREHOLDERS/NOBOs/EMPLOYEES
If your shares are held in your name and
represented by a physical certificate or if
you are a non-objecting beneficial owner or
if you are a participant in the Corporation’s
Employee Share Purchase Plan
INTERNET
Visit www.proxyvote.com and enter your
control number located on the enclosed
voting instruction form.
Go to www.investorvote.com and follow the
instructions. You will need your 15-digit
control number, which is on your proxy form
or voting instruction form.
TELEPHONE
Canadian:
Call 1-866-732-8683 (toll-free in North
America) from a touch-tone phone and
follow the voice instructions. You will need
your 15-digit control number which is noted
on your proxy form or voting instruction
form. If you vote by telephone, you cannot
appoint anyone other than the appointees
named on your proxy form as your
proxyholder.
In English: 1-800-474-7493
In French: 1-800-474-7501
U.S.: 1-800-454-8683
and provide your control number located on
the enclosed voting instruction form.
FACSIMILE
N/A
Complete, sign and date your proxy form or
voting instruction form and send it by fax to
Computershare Investor Services at
1-866-249-7775 (toll-free in North America)
or 1-416-263-9524 (outside of North
America).
MAIL
Complete, sign and date your voting
instruction form and return it in the envelope
provided.
Complete, sign and date your proxy form or
voting instruction form and return it in the
envelope provided.
COGECO INC.
2014 Information Circular
ii
TABLE OF CONTENTS
GENERAL INFORMATION ............................................................................................................................................1
INFORMATION ON VOTING .........................................................................................................................................1
VOTING MATTERS ................................................................................................................................................ 1
RECORD DATE FOR NOTICE OF MEETING........................................................................................................ 1
VOTING SHARES AND PRINCIPAL SHAREHOLDERS ....................................................................................... 1
RESTRICTIONS ON VOTING RIGHTS AND RIGHTS IN THE EVENT OF A TAKEOVER ................................... 2
VOTING BY PROXY ............................................................................................................................................... 2
BUSINESS TO BE TRANSACTED AT THE MEETING .................................................................................................4
1.
FINANCIAL STATEMENTS .......................................................................................................................... 4
2.
ELECTION OF DIRECTORS ........................................................................................................................ 4
3.
APPOINTMENT OF AUDITORS ................................................................................................................ 13
4.
SHAREHOLDERS ADVISORY VOTE ON THE BOARD’S APPROACH TO EXECUTIVE
COMPENSATION ...................................................................................................................................... 14
5.
SHAREHOLDERS PROPOSALS ............................................................................................................... 14
VOTING RESULTS ...................................................................................................................................................... 14
STATEMENT OF CORPORATE GOVERNANCE PRACTICES .................................................................................. 14
BOARD OF DIRECTORS CHARTER ................................................................................................................... 14
COMPOSITION OF THE BOARD ......................................................................................................................... 20
BOARD DIVERSITY ............................................................................................................................................. 20
MAJORITY VOTING FOR DIRECTORS .............................................................................................................. 21
PUBLIC BOARD MEMBERSHIPS ........................................................................................................................ 21
INTERLOCKING DIRECTORSHIPS ..................................................................................................................... 21
BOARD CHAIR ..................................................................................................................................................... 21
BOARD OPERATIONS ......................................................................................................................................... 23
ATTENDANCE RECORD ..................................................................................................................................... 24
INDEPENDENT CHAIRMAN ................................................................................................................................ 24
INDIVIDUAL DIRECTOR MANDATE .................................................................................................................... 24
DECISIONS REQUIRING BOARD APPROVAL ................................................................................................... 24
COMMITTEES ...................................................................................................................................................... 25
CORPORATE SOCIAL RESPONSIBILITY ........................................................................................................... 29
STRATEGIC PLANNING ...................................................................................................................................... 30
DIRECTOR RECRUITMENT AND SKILLS........................................................................................................... 31
EXECUTIVE OFFICER RECRUITMENT .............................................................................................................. 31
ORIENTATION AND CONTINUING EDUCATION ............................................................................................... 32
ASSESSMENTS ................................................................................................................................................... 32
TENURE OF OFFICE ........................................................................................................................................... 33
DISCLOSURE POLICY ........................................................................................................................................ 33
BOARD’S EXPECTATIONS OF CHIEF EXECUTIVE OFFICER AND MANAGEMENT ....................................... 33
SUCCESSION PLANNING ................................................................................................................................... 36
RISK MANAGEMENT ........................................................................................................................................... 36
CODE OF ETHICS ............................................................................................................................................... 37
DIRECTORS’ COMPENSATION ................................................................................................................................. 38
COMPENSATION POLICY ................................................................................................................................... 38
TOTAL DIRECTOR COMPENSATION FOR THE LAST FISCAL YEAR .............................................................. 39
DIRECTOR COMPENSATION TABLE ................................................................................................................. 39
EXECUTIVE OFFICERS COMPENSATION ................................................................................................................ 42
LETTER TO THE SHAREHOLDERS ................................................................................................................... 42
COMPENSATION DISCUSSION AND ANALYSIS ............................................................................................... 46
SUMMARY COMPENSATION TABLE ................................................................................................................. 66
INCENTIVE PLAN AWARDS ................................................................................................................................ 67
RETIREMENT AGREEMENTS ............................................................................................................................. 72
TERMINATION AND CHANGE OF CONTROL BENEFITS.................................................................................. 74
DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE ........................................................................................... 76
INDEBTEDNESS OF DIRECTORS AND OFFICERS.................................................................................................. 76
INTEREST OF MANAGEMENT AND DIRECTORS IN CERTAIN TRANSACTIONS .................................................. 77
OTHER BUSINESS ..................................................................................................................................................... 77
ADDITIONAL INFORMATION...................................................................................................................................... 77
SHAREHOLDER FEEDBACK...................................................................................................................................... 77
APPROVAL OF INFORMATION CIRCULAR............................................................................................................... 78
SCHEDULE “A” – SHAREHOLDER PROPOSALS...................................................................................................... 79
COGECO INC.
iii
INFORMATION CIRCULAR
GENERAL INFORMATION
This information circular is furnished by the Management of COGECO Inc. (“COGECO” or the “Corporation”), which
is soliciting proxies for use at the Annual Meeting of Shareholders of the Corporation (the “Meeting”), and at any
adjournment thereof, to be held at the date, time and place and for the purposes set forth in the foregoing notice of
Meeting. Rules recently adopted by the Canadian securities administrators, known as the “notice and access”
distribution option, allow companies to send shareholders a notice to the effect that proxy materials are available via
the Internet, rather than mailing full sets of proxy materials to them. This year, the Corporation chose to mail full sets
of proxy materials to shareholders. In the future, the Corporation may take advantage of the “notice and access”
distribution option. If in the future the Corporation chooses to send such notices to shareholders, the notices will
contain instructions on how shareholders can gain access to the Corporation’s notice of meeting and management
information circular via the Internet. The notices will also contain instructions on how shareholders can ask that proxy
materials be delivered to them electronically or in printed form on a one-time or ongoing basis.
The Corporation has retained D.F. King Canada to solicit proxies at a fee of approximately $20,000, plus
out-of-pocket expenses. All expenses in connection with the solicitation of proxies will be borne by the Corporation.
If you have questions about the information contained in this Circular or require assistance in completing your proxy
or voting instruction form, please call D.F. King Canada at 1-800-305-6377 (toll free in North America) or
1-201-806-7301 (outside of North America) or email at [email protected].
The Corporation will provide proxy materials to each registered holder of subordinate voting shares and to brokers,
custodians, nominees and fiduciaries with the request that such materials be forwarded to each beneficial owner of
subordinate voting shares.
Unless otherwise stated, the information contained in this Information Circular is given as of November 14, 2014 and
all dollar amounts are in Canadian dollars.
For those shareholders who cannot attend the Meeting in person, the Corporation has made arrangements to provide
a live webcast of the Meeting. Details on how shareholders may listen to and view the proceedings on the webcast
will be found on the Corporation’s web site at www.cogeco.ca/investors and will be provided in a news release prior
to the Meeting.
INFORMATION ON VOTING
VOTING MATTERS
At the Meeting, shareholders will vote on: the election of Directors; the appointment of auditors including authorizing
the board of directors of COGECO (the “Board” or the “Board of Directors”) to fix their remuneration; the
Corporation’s approach to executive compensation; and shareholder proposals A-1 and A-2 set out in Schedule “A”
to this Information Circular.
RECORD DATE FOR NOTICE OF MEETING
The Board of Directors has fixed November 19, 2014 as the record date (the “Record Date”) for the purpose of
determining shareholders entitled to receive the notice of Meeting.
VOTING SHARES AND PRINCIPAL SHAREHOLDERS
As at November 14, 2014, 14,989,338 subordinate voting shares (the “subordinate shares”) and 1,842,860 multiple
voting shares (the “multiple shares”) of the Corporation were outstanding. Such shares are the only shares carrying
the right to vote at the Meeting. Holders of subordinate shares of record at the close of business on the Record Date
will be entitled to one vote per share at the Meeting and holders of multiple shares of record at the close of business
on the Record Date will be entitled to twenty votes per share at the Meeting.
COGECO INC.
1
To the knowledge of the Directors and officers of the Corporation, the only persons or companies who or which, as at
November 14, 2014, beneficially own, directly or indirectly, or control or direct, voting securities carrying 10% or more
of the voting rights attached to any outstanding class of voting securities of the Corporation are the following:
Name
Gestion Audem inc.(1)
Number of
Subordinate
Shares
509,810(2)
Percentage
of Class
3.4
Number of
Multiple
Shares
1,809,660
Percentage
of Class
98.2
Percentage of
All Voting
Rights
70.8
Public Sector Pension Investment Board
2,534,500(3)
16.9


4.9
Rogers Communications Inc.
5,969,390(4)
39.8


11.5
(1)
Gestion Audem inc. is a private company as defined in the Securities Act (Québec), which is controlled by the members of the
family of the late Henri Audet.
(2)
Based on the SEDI declaration filed on May 21, 2013
(3)
Based on the report filed on SEDAR on September 5, 2014.
(4)
Based on the report filed on SEDAR on November 5, 2010.
RESTRICTIONS ON VOTING RIGHTS AND RIGHTS IN THE EVENT OF A TAKEOVER
The authorized share capital of the Corporation is composed of subordinate shares and multiple shares (collectively
the “equity shares”). Each subordinate share entitles the holder to one vote. Each multiple share entitles the holder to
twenty votes. The multiple shares are convertible at any time into subordinate shares on a share-for-share basis. In
all other respects, the equity shares have the same rights. A general description of the rights, privileges and
restrictions attaching to the subordinate shares and multiple shares can be found in section 8.1 of the Corporation’s
Annual Information Form. As at November 14, 2014, the subordinate shares represent 28.9% of the aggregate voting
rights attached to the Corporation’s outstanding shares.
The issue and transfer of the equity shares of the Corporation are constrained by its Articles in accordance with the
Business Corporations Act (Québec) (the “BCAQ”), in order to ensure that the Corporation and its subsidiaries
comply with the directions or the conditions of the Corporation’s licences granted by the Canadian Radio-television
and Telecommunications Commission (“CRTC”). These restrictions limit the extent to which equity can be issued or
transferred to non-Canadian residents and preclude control by non-Canadian residents.
If a takeover bid (as defined in the articles of the Corporation) is made for the multiple shares and subject to certain
conditions, including the acceptance of such takeover bid by the majority holder, each subordinate share shall
become, upon such takeover bid, convertible into one multiple share, at the option of the holder, in order to allow
such holder to participate in the takeover bid and accept it, and for these purposes only, provided that the takeover
bid is completed by the offeror.
VOTING BY PROXY
REGISTERED OWNERS
Registered shareholders may vote in person at the Meeting or may give another person authority to vote at the
Meeting on their behalf by appointing a proxyholder. Please complete, sign, date and return the form in the
envelope provided or by facsimile to Computershare’s toll-free line at 1-866-249-7775 for calls within Canada
and the United States or at 1-416-263-9524 for calls outside Canada and the United States or you can vote by
telephone or internet by following the instructions on your proxy form, so that in each case the completed
form arrives no later than 5:00 p.m. (Eastern Standard Time) on January 13, 2015 or, if the Meeting is
adjourned or postponed, by 5:00 p.m. (Eastern Standard Time) one (1) business day (excluding Saturdays,
Sundays and holidays) before the day on which the Meeting is reconvened. Late proxies may be accepted or
rejected by the Chair of the Meeting at his or her discretion.
BENEFICIAL OWNERS
The information set forth in this section is of significant importance if you do not hold your shares in your own name.
Only proxies deposited by shareholders whose names appear on the records of COGECO as the registered holders
of multiple shares or subordinate shares can be recognized and acted upon at the Meeting. If subordinate shares are
listed in your account statement provided by your broker or other institution, then, in almost all cases, those
subordinate shares will not be registered in your name on the records of COGECO. Such subordinate shares will
COGECO INC.
2
likely be registered under the name of your broker or an agent of that broker. In Canada, the vast majority of such
shares are registered under the name of CDS & Co., the registration name for CDS Clearing and Depository Services
Inc., which acts as nominee for many Canadian brokerage firms. You are a non-registered shareholder or “beneficial
owner” if your shares are held by a nominee, that is, if your certificate has been filed with a bank, a trust company, a
stock broker, a trustee or any other institution. Under applicable securities legislation, a beneficial owner of securities
is a “non-objecting beneficial owner”(or “NOBO”) if such beneficial owner has, or is deemed to have, provided
instructions to the intermediary holding the securities on such beneficial owner’s behalf not objecting to the
intermediary disclosing ownership information about the beneficial owner in accordance with said legislation, and a
beneficial owner is an “objecting beneficial owner” (or “OBO”) if such beneficial owner has or is deemed to have
provided instructions objecting to same.
If you are a NOBO, and Computershare has sent the proxy related materials directly to you, your name and address
and information about your holdings of subordinate shares have been obtained in accordance with applicable
securities legislation from the intermediary holding on your behalf. By choosing to send the proxy related materials to
you directly, as applicable, the Corporation (and not the intermediary holding on your behalf) has assumed
responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions.
Please provide your voting instructions as specified in the enclosed voting instruction form.
However, if you wish to vote in person at the Meeting, you must insert your own name in the space provided
on the voting instruction form you received and return the completed form to Computershare.
If you are an OBO, you received these materials from your intermediary or its agent, and your intermediary is
required to seek your instructions as to the manner in which to exercise the voting rights attached to your shares. The
Corporation has agreed to pay for intermediaries to deliver to OBOs the proxy-related materials and the relevant
voting instruction form. The voting instruction form that is sent to an OBO by the intermediary or its agent
should contain an explanation as to how you can exercise the voting rights attached to your shares,
including how to attend and vote directly at the Meeting. Please read such instructions carefully in order to
ensure that your shares are voted at the Meeting.
APPOINTING A PROXYHOLDER
A proxyholder is the person you appoint to act on your behalf at the Meeting and to vote your shares in your name.
You may choose anyone to be your proxyholder – the person you choose does not have to be a shareholder of
COGECO. Simply insert the person’s name in the blank space provided on the proxy form (registered shareholders)
or the voting instruction form (beneficial shareholders). You should be sure that this person is attending the Meeting
and is aware that he or she has been appointed to vote your shares. If you do not insert a name in the blank space,
then the persons named on the form, being Messrs. Peeters, Audet or Jolivet, each of whom is a Director or senior
officer of COGECO, will be appointed to act as your proxyholder.
Your appointed proxyholder is authorized to vote and act for you at the Meeting, including any continuation after an
adjournment of the Meeting. On the form you should indicate how you want your proxyholder to vote your shares.
You may vote FOR or WITHHOLD your vote on each proposed nominee for election as a Director and on the
appointment of the auditors including authorizing the Board of Directors to fix their remuneration and may
vote FOR or AGAINST the resolution to accept the Board’s approach to executive compensation and FOR or
AGAINST shareholder proposals A-1 and A-2 set forth in Schedule “A” hereto. Alternatively, in each
instance, you can let your proxyholder decide for you.
All multiple shares or subordinate shares represented by properly executed and deposited forms of proxy will be
voted or withheld from voting on or voted for or against, as the case may be, the matters identified in the notice of
Meeting in accordance with the instructions of such respective shareholders.
VOTING DISCRETION OF PROXYHOLDER
If you give directions on how to vote your shares, your proxyholder must vote your shares according to your
instructions. If your proxy form or voting instruction form does not specify how to vote on a particular issue, then your
proxyholder can vote your shares as he or she sees fit. If your proxyholder does not attend the Meeting and vote in
person, your shares will not be voted.
COGECO INC.
3
If you have appointed a person designated by COGECO as proxyholder as provided in the enclosed form of
proxy and you do not provide any instructions concerning a matter identified in the Notice of Meeting, the
subordinate shares represented by such proxy will be voted as follows:
FOR the election of each of the eight persons nominated for election as a Director;
FOR the appointment of Deloitte LLP, Chartered Accountants, as auditors and the authorization of
the Board of Directors to set their remuneration;
FOR the advisory resolution accepting the Board’s approach to executive compensation disclosed
in this Information Circular; and
AGAINST shareholder proposals A-1 and A-2 set out in Schedule “A” hereto.
The accompanying form of proxy confers discretionary authority on the persons named therein with respect to
amendments or variations to matters identified in the notice of Meeting and with respect to other business which may
properly be brought before the Meeting. At the date of this Information Circular, Management of the Corporation
knows of no such amendments, variations or other business to be brought before the Meeting.
REVOKING YOUR PROXY
A shareholder who has given a proxy may revoke it, in accordance with section 172 of the BCAQ, at any time prior to
its use, by instrument in writing executed by the shareholder or by his or her attorney authorized in writing or, if the
shareholder is a corporation, by an officer or attorney thereof duly authorized. Such instrument should be delivered to
the Corporate Secretary at the registered office of COGECO, 5 Place Ville-Marie, Suite 1700, Montréal, Québec,
H3B 0B3 at any time up to and including the close of business on the last business day preceding the day of the
Meeting or any adjournment thereof or depositing it with the Chair of the Meeting on the day of the Meeting, being
January 14, 2015 or any adjournment thereof, or in any other manner permitted by law.
BUSINESS TO BE TRANSACTED AT THE MEETING
This Information Circular contains information relating to the receipt of COGECO’s audited consolidated financial
statements, the election of Directors, the appointment of auditors including authorizing the Board of Directors to fix
their remuneration, the advisory resolution to accept the Board’s approach to executive compensation disclosed in
the Information Circular and each of the two shareholder proposals submitted by MÉDAC (Mouvement d’éducation et
de défense des actionnaires) set forth in Schedule “A” hereto.
1.
FINANCIAL STATEMENTS
The audited consolidated financial statements of COGECO for the year ended August 31, 2014 and the report of the
auditors thereon will be placed before the Meeting. These audited consolidated financial statements form part of the
2014 Annual Report of COGECO.
Copies of the 2014 Annual Report, in English or French, may be obtained from the Corporate Secretary of COGECO
upon request and will be available at the Meeting. The full text of the 2014 Annual Report is available on COGECO’s
web site at www.cogeco.ca.
2.
ELECTION OF DIRECTORS
The Board has established eight as the number of Directors to be elected at the Meeting. The term of office of each
Director will expire at the end of the next annual meeting of the Corporation or upon the election of a successor. Each
of the eight nominees is currently a Director of the Corporation.
Unless authority to vote on the election of one or more of the eight Director nominees is withheld in the
accompanying form of proxy, it is the intention of the persons named therein to vote the shares represented thereby
FOR the election of each of the nominees of Management listed in the following table or, in the event of any
vacancies among such nominees, FOR the remaining nominees and substitute nominees of Management.
COGECO INC.
4
INFORMATION CONCERNING NOMINEES AS DIRECTORS
The nominees as Directors have supplied the information concerning their principal occupation, the number of
subordinate shares of the Corporation beneficially owned or over which control or direction is exercised and the
additional information contained herein.
LOUIS AUDET, Eng., MBA, C.M.
Mr. Audet has been President and Chief Executive Officer of COGECO and Cogeco
Cable since 1993.
He has served on the boards of Clarica Life Insurance Company, CableLabs, the
Canadian Association of Broadcasters, l’Association canadienne de la radio et de la
télévision de langue française and the Canadian Cable Telecommunications Association.
Mr. Audet has been a member of the boards of Collège Jean-de-Brébeuf, La Corporation
de l’École Polytechnique de Montréal, l’Orchestre symphonique de Montréal. He has
been involved in several major fund-raising campaigns for charitable causes and is a
member of the campaign cabinet of the Foundation Centre Hospitalier de l’Université de
Montréal (CHUM) since March 2012. He is currently Chair of the 2014-2019 fundraising
campaign for the Old Brewery Mission Foundation, a major foundation which provides
emergency and other services for homeless people in the Montreal area.
Director, President and
Chief Executive Officer(1)(2)(3)
Westmount, Québec
Age: 63
Director since 1993
Member of the Strategic Opportunities
Committee
Securities Held
Years
Subordinate Shares
and Multiple Shares(6)
Incentive Share Units
(ISUs)/Performance
Share Units (PSUs)
Total Subordinate
Shares, Multiple
Shares, ISUs and PSUs
Total Market Value of
Subordinate Shares,
Multiple Shares, ISUs
and PSUs(7)
$
2014(4)
92,668
31,901/5,500
130,069
7,385,318
(5)
86,798
37,501/—
124,299
5,966,352
2013
Minimum Share Ownership: Attained (including holdings in Cogeco Cable Inc.)
Options held: None
Public Board Membership During Last Five Years: Cogeco Cable Inc. (member of the Strategic Opportunities Committee)
Public Board interlocks: Cogeco Cable Inc. (member of the Strategic Opportunities Committee)
Voting Results on Election at 2013 Annual Meeting:
Votes For:
Votes Withheld:
% of Votes For:
43,282,228
11,813
99.97%
COGECO INC.
5
ELISABETTA BIGSBY, M. Econ.
Ms. Bigsby is a corporate Director. She pursued her career at RBC Financial Group in a
variety of senior business and strategy roles from 1977 to 2007. She was notably a
member of the Executive Committee and the Chief Human Resources Officer from 2001
to 2007.
She is a Director of la Caisse de dépôt et placement du Québec and serves as the Chair
of its Human Resources Committee.
She is a past Director of the National Gallery of Canada Foundation, la Chambre de
Commerce de Montréal, the Canadian Opera Company, les Grands Ballets Canadiens
and McGill University’s Pension Fund.
Director(3)
Toronto, Ontario
Age: 65
Independent Director since 2012
Member of the Audit Committee and
member and Chair of the Human
Resources Committees
Securities Held
Years
Subordinate Shares(6)
Deferred Share Units
(DSUs)
Total Subordinate
Shares and DSUs
Subordinate Shares
and DSUs(7)
$
2014(4)
Nil
4,304
4,304
244,381
(5)
Nil
2,395
2,395
114,960
2013
Minimum Share Ownership: Attained
Options held: None
Public Board Membership During Last Five Years: None
Public Board interlocks: None
Votes For:
Votes Withheld:
% of Votes For:
43,281,691
12,350
99.97%
COGECO INC.
6
PIERRE L. COMTOIS, B. SC. Com., Adm. A.
Mr. Comtois has been, since January 2007, Vice Chairman of the Board and Director of
Optimum Asset Management Inc. Previously, he was successively Executive
Vice President, Finance and Treasurer (1992 to 1996) of Optimum Group Inc. (Canadian
private international financial group) and President and General Manager (1996 to 2006)
of Optimum Asset Management Inc. From 1982 to 1992, he was Vice President and
General Manager, Finance of General Trust of Canada.
He is a Director of Optimum Group Inc., Optimum Vie (France) and Banque Martin Maurel
(France).
Director(3)
Montréal, Québec
Age: 71
Member and Chair of the Audit
Committee and member of the
Corporate Governance Committee
Securities Held
Years
(DSUs)
Total Subordinate
Shares and DSUs
Subordinate Shares
and DSUs(7)
$
2014(4)
10,000
12,414
22,414
1,272,667
(5)
10,000
10,301
20,301
974,448
2013
Options held: None
Votes For:
Votes Withheld:
% of Votes For:
43,272,079
21,962
99.95%
COGECO INC.
7
PAULE DORÉ
Ms. Doré is a corporate Director. Throughout her career she has held a number of
leadership positions with companies and industry associations and supported many
community and business organizations. Between 1990 and 2006 she was a member of the
executive team of CGI Group Inc., a global leader in information technologies services,
notably as Executive Vice President and Chief Corporate Officer.
She is a Director of CGI Group Inc. and Héroux Devtek Inc., which are reporting issuers.
She sits on the governance committee of CGI Group and is Chairman of the Human
Resources and Corporate Governance Committees of Héroux Devtek. She was formerly a
director of Axa Canada and a member of its Corporate Governance Committee.
She is a Director of the Institute for the governance of public and private organizations
(IGOPP) and chairs the Audit Committee. She is also a Director of the Musée
Pointe-à-Callières and member of the Board Executive Committee.
Director(3)
Montréal, Québec
Age: 63
Member and Chair of the Corporate
Governance Committee and member of
the Human Resources Committee
Securities Held
Years
(DSUs)
Total Subordinate
Shares and DSUs
Subordinate Shares
and DSUs(7)
$
2014(4)
6,500
Nil
6,500
369,070
(5)
6,500
Nil
6,500
312,000
2013
Options held: None
Public Board Membership During Last Five Years: CGI Group Inc. (member of the Governance Committee), Héroux Devtek Inc.
(Chairman of the Human Resources and Corporate Governance Committees)
Votes For:
Votes Withheld:
% of Votes For:
43,285,951
8,090
99.98%
COGECO INC.
8
CLAUDE A. GARCIA, B.A., B.Com.
Mr. Garcia is a corporate Director. From June 1993 to December 2004, he was President,
Canadian Operations of The Standard Life Assurance Company. Prior to that, he was its
Senior Vice-President and Actuary and then Executive Vice-President and Chief Operating
Officer.
He is a Director of Goodfellow Inc. (a lumber and wood products distributor) and of BTB
Real Estate Investment Trust, which are reporting issuers. He chairs the Board and the
Compensation Committee of Goodfellow Inc. and chairs the Audit Committee of BTB Real
Estate Investment Trust. He was formerly a Director and chair of the Audit Committee of
L’Excellence, Compagnie d’assurance vie.
Mr. Garcia is a member of the Board and member of the Committee on Standards of
OmbudService for Life & Health Insurance. He has also served as Chairman of the YMCA
Foundation of Montreal and as a Board member of the Clinical Research Institute of
Montreal and of the Montreal Exchange.
Director(1)(3)
Montréal, Québec
Age: 74
Member of the Human Resources,
Audit and Strategic Opportunities
Committees
Securities Held
Years
(DSUs)
Total Subordinate
Shares and DSUs
Subordinate Shares
and DSUs(7)
$
2014(4)
3,000
4,296
7,296
414,267
(5)
3,000
3,080
6,080
291,840
2013
Options held: None
Public Board Membership During Last Five Years: Cogeco Cable Inc., (member of the Human Resources and Strategic
Opportunities Committees), Goodfellow Inc. (Chairman of the Board and of the Compensation Committee), BTB Real Estate
Investment Trust (Chairman of the Audit Committee), L’Excellence, Compagnie d’Assurance-Vie (Chairman of the Audit Committee)
Public Board interlocks: Cogeco Cable Inc. (member of the Human Resources and Strategic Opportunities Committees)
Votes For:
Votes Withheld:
% of Votes For:
43,271,129
22,912
99.95%
COGECO INC.
9
NORMAND LEGAULT, B.B.A.
Mr. Legault is a corporate Director. He held several positions from 1989 to 2009 within the
Grand Prix F1 of Canada including being President and Chief Executive Officer from 1996
to 2009. Prior to that, he was Vice President of The Alouettes Montréal Football Club from
1986 to 1987 and President of the Montréal 2005 World Aquatics Championship. As an
entrepreneur, he was also involved in launching various enterprises in the graphic design
and event organization industries.
Mr. Legault currently serves as Chairman of Montréal International. He is also a board
member of the Aéroports de Montréal (ADM) organization.
He has served as a Director with numerous corporations, both private and public,
including, among others, Distinction Group Inc., Société Générale de Financement,
Société de la Place des Arts de Montréal and the Board of Trade of Metropolitan Montréal.
Director(3)
Montréal, Québec
Age: 59
Member of the Strategic Opportunities
Committee
Securities Held
Years
(DSUs)
Total Subordinate
Shares and DSUs
Subordinate Shares
and DSUs(7)
$
2014(4)
Nil
3,851
3,851
218,660
2013(5)
Nil
2,194
2,194
105,312
Minimum Share Ownership: To be attained within five years of date of initial election (i.e. by January 26, 2017)
Options held: None
Votes For:
Votes Withheld:
% of Votes For:
43,283,828
10,213
99.98%
COGECO INC.
10
DAVID MCAUSLAND, B.C.L., LL.B.
Mr. McAusland has been a partner of McCarthy Tétrault LLP, a major law firm in Canada,
since June 2009 where he is a corporate strategist and advisor and focuses on major
corporate transactions, securities, corporate finance, governance and regulatory affairs.
From 1999 to February 2008, he was a senior officer (latterly, Executive Vice President,
Corporate Development and Chief Legal Officer) of Alcan Inc., a large multinational
industrial company. As such he was involved in the design and execution of major
strategic initiatives and led an international team that completed more than 75 acquisition
and divestiture transactions. Prior to joining Alcan, Mr. McAusland was managing partner
of a major law firm.
He is a Director of Cascades Inc., Khan Resources Inc. and ATS Automation Tooling
Systems Inc., all of which are reporting issuers. He serves as Chairman of the Human
Resources Committee and a member of the Corporate Governance and Nominating
Committee for Cascades Inc.; he is a member of the Compensation Committee of Khan
Resources Inc. and he serves as non-executive Chairman of ATS Automation Tooling
Systems Inc. Furthermore, he is non-executive Chairman of Montrusco Bolton
Investments, a privately held corporation. In addition, he is a Director of a number of notfor-profit corporations.
Director(1)(3)
Beaconsfield, Québec
Age: 60
Member and Chair of the Strategic
Opportunities Committee and member
of the Corporate Governance
Committee
Securities Held
Years
(DSUs)
Total Subordinate
Shares and DSUs
Subordinate Shares
and DSUs(7)
$
2014(4)
4,170
6,889
11,059
627,930
(5)
4,170
5,668
9,838
472,224
2013
Options held: None
Public Board Membership During Last Five Years: Cogeco Cable Inc. (member of the Corporate Governance Committee and
Chairman of the Strategic Opportunities Committee), Cascades Inc. (Chairman of the Human Resources and Corporate
Governance Committees), Khan Resources Inc. (member of the Compensation Committee), ATS Automation Tooling Systems Inc.
(non-executive Chairman), Equinox Minerals Ltd. (Chairman of the Governance Committee), World Color Press Inc. (member of the
Governance Committee)
Public Board interlocks: Cogeco Cable Inc. (member of the Corporate Governance Committee and Chairman of the Strategic
Opportunities Committee)
Votes For:
Votes Withheld:
% of Votes For:
43,273,491
20,550
99.95%
COGECO INC.
11
JAN PEETERS
Mr. Peeters has been Board Chair of COGECO and Cogeco Cable since 2004. He is
President and Chief Executive Officer and Board Chair of Olameter Inc., a telemetry
company operating in 36 Provinces and States in North America. He was President and
Chief Executive Officer of ƒONOROLA, a telecommunications company, from 1990 to
1998.
He is a Director of Intersil Corporation (a U.S. listed issuer) and serves as chair of its Audit
Committee and member of the Nominations and Governance Committee. He was a
founder of iNovia Capital, a venture capitalist fund manager based in Montréal and its
Chairman of the Board from 2001 to 2010. He still serves on iNovia Capital’s Investment
Committee.
He sat on the Board of Governors of McGill University from 1999 to 2009 and is now
Governor Emeritus.
Director and Board Chair(1)(3)
Montréal, Québec
Age: 63
Observer at Audit, Human Resources,
Corporate Governance and Strategic
Opportunities Committees meetings
Securities Held
Years
(DSUs)
Total Subordinate
Shares and DSUs
Subordinate Shares
and DSUs(7)
$
2014(4)
6,555
8,359
14,914
846,817
(5)
6,555
6,811
13,366
641,568
2013
Options held: None
Public Board Membership During Last Five Years: Cogeco Cable Inc. (Chairman of the Board), Intersil Corporation (Chairman of
the Audit Committee and member of the Nominations and Governance Committee)
Public Board interlocks: Cogeco Cable Inc.
Votes For:
Votes Withheld:
% of Votes For:
43,280,391
13,650
99.97%
(1)
Messrs. Audet, Garcia, McAusland and Peeters are also nominees as Directors of Cogeco Cable Inc. (“Cogeco Cable”).
(2)
Mr. Audet was Director of TQS Inc. which filed for protection under the Companies Creditor Arrangement Act on
December 18, 2007. The shares of TQS Inc. were sold with court approval in August 2008.
(3)
As at November 14, 2014, the nominees as Directors of the Corporation, who are current Directors of the Corporation, also
beneficially own, directly or indirectly, or control or direct subordinate voting shares of Cogeco Cable and deferred share units
(“DSU”) of Cogeco Cable as follows:
Name
Louis Audet*
Elisabetta Bigsby
Subordinate Voting Shares
51,292
DSUs
N/A


Pierre L. Comtois


Paule Doré


COGECO INC.
12
Name
Claude A. Garcia
Normand Legault
Subordinate Voting Shares
5,350
DSUs
5,081

4,020
7,960

5,865
7,291
David McAusland
Jan Peeters
* As at November 14, 2014, Mr. Audet also owns 17,601 incentive share units (“ISU”) and 5,200 performance share units
(“PSU”) of Cogeco Cable.
(4)
As at November 14, 2014, which is the date of this Information Circular.
(5)
As at November 15, 2013, which was the date of the Information Circular in fiscal 2013.
(6)
Includes subordinate shares beneficially owned directly or indirectly, or controlled by nominee.
(7)
Based on a share price of $56.78 and $48.00 which were the closing prices of COGECO’s subordinate shares, respectively on
November 14, 2014 and November 15, 2013. For Mr. Audet, the value of his PSUs was determined assuming full vesting at
target. For additional information, please refer to section “Performance Share Units” on page 59.
3.
APPOINTMENT OF AUDITORS
At the Meeting, the shareholders will be called upon, as recommended by the Audit Committee, to appoint auditors to
hold office until the next annual meeting of shareholders and to authorize the Board of Directors to fix their
remuneration.
It is the intention of the persons named in the enclosed form of proxy to vote the shares represented thereby FOR the
appointment as auditors of the Corporation of the firm, Deloitte LLP, at a remuneration to be fixed by the Board of
Directors, unless authority to vote on the appointment of auditors is withheld.
Deloitte LLP have been the Corporation’s auditors since 1957. In addition to performing the audit of the Corporation’s
consolidated financial statements, Deloitte LLP provided other services to the Corporation and its subsidiaries. The
Corporation recently adopted a policy of conducting a comprehensive review of the auditors not less often than every
five years.
The following table presents, by category, the fees billed by the External Auditors of the Corporation, Deloitte LLP, for
the fiscal years 2014 and 2013:
CATEGORY OF FEES
2014
$
1,544,668
243,787
538,210
95,655
2,422,320
Audit Fees(1)
Audit-Related Fees(2)
Tax Fees(3)
Other Fees(4)
Total
2013
$
1,228,302
709,718
1,366,510
90,208
3,394,738
(1)
“Audit fees” include mainly fees for annual audit and quarterly reviews of the Corporation and some of its subsidiaries,
including Atlantic Broadband, Cogeco Data Services and Peer 1 Hosting.
(2)
“Audit-Related Fees” include mainly fees related to financings, acquisitions, financial information presentation and certification
and annual audit fees in respect of the Corporation’s pension benefit plans. In 2013, it includes the fees related to the
acquisitions and financings of Atlantic Broadband and Peer 1 Hosting.
(3)
“Tax Fees” include tax compliance, tax planning related to acquisitions and tax advisory services. In 2013, tax fees were
related essentially to the acquisitions of Atlantic Broadband and Peer 1 Hosting in order to organize the transactions in the tax
most efficient and cost-conscious way.
(4)
“Other Fees” include principally translation services.
COGECO INC.
13
4.
SHAREHOLDERS ADVISORY VOTE ON THE BOARD’S APPROACH TO EXECUTIVE COMPENSATION
At the Meeting, the shareholders will be called upon to vote for the second year FOR or AGAINST the advisory
resolution to accept the Board’s approach to executive compensation disclosed in this Information Circular.
The Board of Directors continues to believe that shareholders should have the opportunity to fully understand the
objectives and principles that the Board has used in its approach to executive compensation and to have an advisory
vote on the Board’s approach to executive compensation.
To assist you in making your voting decision, we refer you to the letter from the Chairman of the Human Resources
Committee starting at page 42 of this Information Circular and the “Compensation Discussion and Analysis” (“CD&A”)
which follows the letter. The CD&A describes the Board’s approach to executive compensation, the details of the
compensation program and the Board’s compensation decisions for the fiscal year ended on August 31, 2014. This
disclosure has been approved by the Board on the recommendation of the Human Resources Committee. Comments
and questions regarding our executive compensation program are welcome and may be directed to the Corporation
at: [email protected].
Adoption of the advisory resolution will require that it be passed by a majority of the votes cast by
shareholders present in person or represented by proxy at the Meeting. As this is an advisory vote, the
results will not be binding upon the Corporation. However, the Board of Directors take the results of the vote
into account, as appropriate, when considering future executive compensation policy and programs and in
determining whether there is a need to significantly increase their engagement with shareholders on
compensation related matters.
Management and the Board of Directors recommend that the shareholders vote FOR this “Say on Pay”
resolution.
5.
SHAREHOLDERS PROPOSALS
At the meeting, the shareholders will be called upon to vote FOR or AGAINST shareholder proposals A-1 and A-2 set
out in Schedule “A” hereto. Information on such shareholder proposals is set out in Schedule “A”.
It is the intention of each of the persons named in the enclosed form of proxy to vote the shares represented
thereby AGAINST shareholder proposals A-1 and A-2 unless otherwise directed.
VOTING RESULTS
Voting results on the election of Directors (on a Director by Director basis), on the appointment of auditors, on the
advisory vote accepting the Board’s approach on executive compensation and on shareholder proposals A-1 and A-2
will be posted on SEDAR promptly following the Meeting.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES
BOARD OF DIRECTORS CHARTER
1.
STATEMENT OF POLICY
The Board of Directors of COGECO is elected by the Corporation’s shareholders to supervise the Management
of the Corporation in the context of its global business and affairs.
The prime responsibility of the Board is to the Corporation and is to oversee its Management and to preserve
and enhance the Corporation, with due regard for the interests of its shareholders generally and other
stakeholders.
COGECO INC.
14
2.
COMPOSITION, QUALIFICATION AND ORGANIZATION OF THE BOARD
2.1. SELECTION OF MEMBERS
The Corporate Governance Committee of the Board maintains an overview of the desired size and composition
of the Board, the need for recruitment and the expected experience of the new candidates. It also advises the
Board on the competencies and skills that the Board, as a whole, and individual Directors should possess in the
context of the Corporation’s global business and affairs and determines the competencies, skills and qualities the
Human Resources Committee should seek in candidates as Directors.
Unless determined otherwise by the Board, when a Director is being recruited, an ad hoc committee composed
of the Board Chair, the Chairs of the Human Resources and Corporate Governance Committees and the
President and CEO of the Corporation initiate the process by seeking input and suggestions, including from
Directors and outside consultants and in doing so, such committee takes into account the qualities or experience
that a candidate should possess and that may include such considerations as educational background, any
special training of relevance, business experience in or outside the cable, telecommunication, enterprise services
and media sectors, national or international exposure, directorial experience, diversity and other factors. Against
that backdrop, the ad hoc committee brings the proposed candidate forward to the Human Resources Committee
and the Corporate Governance Committee for assessment, prior to his or her submission to the Board. The
Board approves the final choice of candidates for nomination and proposed election by the shareholders.
All new Directors are briefed on the Corporation by the Board Chair and Management on the Corporation’s
structure, financial situation, regulatory environment and other aspects of its global business and affairs. They
are also provided with the Board Charter, Individual Director Mandate, Cogeco Group Code of Ethics and other
key mandates and policies.
The Corporation recognizes the importance of, and facilitates, ongoing Director education, while recognizing that
a Director should take personal responsibility for this process.
2.2. MEMBERSHIP CRITERIA
Board members must have the requisite qualifications under the law and the by-laws of the Corporation. They
must have an appropriate mix of skills, knowledge and experience in business and an understanding of the
industry segments in which the Corporation operates or commit to acquire such an understanding. Directors
selected should be able to devote the requisite time for all the Board's business. The Directors of the Corporation
are required to act with prudence and diligence, honesty and loyalty to the Corporation and with due regard to
the interest of its shareholders and other stakeholders.
2.3. INDEPENDENT DIRECTORS
Boards function most effectively when their individual Directors are free from conflicts of interest and can
exercise independent judgment when discharging their responsibilities. The Corporation complies with the
requirements of any stock exchange on which its securities are listed and the independence requirements of
applicable securities laws. A majority of the Board shall be composed of Directors who are independent, in
accordance with the foregoing.
Where the Corporation or any of its subsidiaries enters, or proposes to enter, into a business relationship with a
corporation or entity with which a Director is affiliated as an officer, partner or significant shareholder, the
following guidelines apply:
(a)
The Corporation will consider whether the relationship would cause the Director to lose his or her status
as an independent Director, whether the relationship would prevent the Director from serving on any
particular Board Committee, whether the relationship was already in existence before the Director
joined the Board and who initiated the relationship and whether it is beneficial to the Corporation;
(b)
Any new relationship must be brought to the attention of the Chairman of the Board, in advance where
practicable and, where such relationship is not covered by applicable securities laws, be subject to the
determination of the Corporate Governance Committee as to its materiality and the consequent effect
on the independence of the Director; and
COGECO INC.
15
Any material relationship will be disclosed in the Corporation’s public disclosure documents in
accordance with applicable securities laws and regulations.
(c)
2.4. BOARD CHAIR LEADERSHIP
The Board shall appoint its Chair and Vice-Chair (if one is to be appointed) from among the Corporation’s
Directors. The Board Chair will generally be an independent Director. Should the Chair for any reason be a
Director who is an executive of the Corporation, the Board shall also appoint a lead Director from among the
independent Directors to chair the Board at all meetings where such executive is absent and to assume other
appropriate functions. (See “Resources and Authority of the Board”.)
2.5. RETIREMENT AGE
Directors are not required to retire at a mandatory age as this could have the effect of forcing Directors off the
Board who have gained a deep knowledge of the Corporation’s business and who are making a valuable
contribution. At the same time it is recognized that there is value in a measure of turnover of Board membership
to provide fresh approaches and new skills and knowledge. The membership on the Board is, accordingly,
reviewed annually to consider its skills, knowledge and experience as well as its overall composition and
effectiveness and to obtain an optimal balance of Directors to ensure appropriate continuity.
2.6. TERM OF DIRECTORS
The Directors are elected by the shareholders at every annual meeting except where the Board appoints a
Director to fill a vacancy until the next annual meeting. The term of office of each Director shall expire at the next
annual meeting of the Corporation, or upon the election of a successor.
2.7. MEETING RECORDS
Minutes shall be kept of meetings of the Board and its Committees and shall be available to all Directors.
3.
MEETINGS OF THE BOARD
3.1. BOARD AGENDA
The Board Chair, in consultation with the appropriate members of Management, develops the agenda for Board
meetings.
3.2. BOARD MATERIAL DISTRIBUTION
Financial and other information that is important to the understanding of agenda items is distributed to Directors
in advance of the Board meeting to facilitate Directors’ preparation for meetings.
3.3. BOARD MEETING FREQUENCY AND SCHEDULE
In order to carry out its mandate, the Board holds regular meetings on a quarterly basis and additional meetings
to consider particular issues or strategic planning or to conduct specific reviews whenever appropriate.
3.4. ATTENDANCE
Directors are expected, subject to scheduling conflicts, to attend all Board meetings in person, to the extent
feasible (other than conference call meetings) and a record of attendance is kept.
3.5. RESPONSIBILITIES AND DUTIES
Directors are expected to carry out their oversight responsibilities and specific duties in accordance with the
Individual Director Mandate.
COGECO INC.
16
3.6. MANAGEMENT AT MEETINGS
The Board of Directors invites members of Management to attend part of Board meetings to make presentations
to allow Directors to gain additional understanding and insight into the Corporation’s businesses.
3.7. IN CAMERA SESSIONS
The Board meets in camera at each of its meetings without any member of Management present to ensure free
and open discussion among the independent Directors, unless waived at a particular meeting by the independent
Directors.
4.
DUTIES AND RESPONSIBILITIES OF THE BOARD
In addition to its statutory responsibilities, the Board has the following duties and responsibilities:
(a)
ensuring that the Corporation, including its subsidiaries and controlled entities, is operated so as to
preserve its financial integrity and in accordance with policies approved by the Board;
(b)
in general seeking to gain satisfaction as to the integrity of the President and Chief Executive Officer
and other senior executive officers, including those of its subsidiaries and controlled entities. and that all
such officers through their own example, through implementation of the Code of Ethics and otherwise,
create a culture of integrity throughout the Corporation;
(c)
reviewing with the Audit Committee the financial performance, financial reporting and disclosure of the
Corporation and its subsidiaries and controlled entities as well as obtaining reasonable assurance that
their internal controls and management information systems are adequate;
(d)
appointing the President and Chief Executive Officer and senior executives of the Corporation, ensuring
that they are of the caliber and have the personal and other qualities required for their roles and
planning their succession (including how senior executives are to be trained and their performance
monitored) taking into account the recommendations of the Human Resources Committee;
(e)
developing, in concert with the President and Chief Executive Officer and the Board Chair, and
approving, the position description for the President and Chief Executive Officer, including delineating
management responsibilities, and the corporate goals and objectives for which he is responsible;
(f)
reviewing annually and overseeing the implementation of the overall strategic plan and direction of the
Corporation which take into account, among other things, the opportunities and risks of its global
business and affairs, and which are developed at first by Management;
(g)
determining the Corporation’s tolerance for risks and approving the Risk Management Policy and any
material changes made thereto;
(h)
identifying, in conjunction with Management, the principal business risks facing the Corporation,
including its subsidiaries and controlled entities (the “Principal Business Risks”), in the context of its
global business and affairs;
(i)
reviewing with the Audit Committee, the Principal Business Risks and the implementation by
Management of appropriate measures to manage these risks;
(j)
ensuring that appropriate structures and procedures are in place so that the Board can function
independently of Management;
(k)
providing a source of advice and counsel to the President and Chief Executive Officer and senior
executives on various issues of importance for the Corporation;
(l)
reviewing and approving key policies developed by Management and continuous disclosure documents;
(m)
working to ensure that its expectations of Management are understood;
COGECO INC.
17
(n)
adopting and overseeing the Corporation’s disclosure policy and its implementation, including
disclosure of material information, investor relations and security holders communications;
(o)
adopting the Corporation’s insider trading policy and any material change thereto;
(p)
considering measures for receiving communication feedback from security holders directly and/or
through Management;
(q)
adopting a Code of Ethics that is applicable to Directors, officers and employees of the Corporation that
is designed to promote and foster integrity and deter inappropriate action or wrongdoing, monitoring
compliance with such Code and directly, or through delegation to the Corporate Governance Committee
granting waivers of compliance for Directors or executive officers in appropriate circumstances;
(r)
adopting the Corporation’s corporate social responsibility policy and any material change made thereto;
(s)
conducting, through the Corporate Governance Committee, an annual review of Board and Committee
effectiveness (including Directors’ individual contributions);
(t)
reviewing with the Human Resources Committee the adequacy and form of the compensation of
Directors, the Board Chair and Committee Chairs to ensure their compensation adequately reflects the
responsibilities and risks involved in holding such office and approving their compensation after giving
consideration to the recommendations of the Human Resources Committee;
(u)
evaluating, through the Human Resources Committee, the compensation of senior executives of the
Corporation, including those of its subsidiaries and controlled entities, in line with corporate policies in
effect and stated budget and other objectives;
(v)
reviewing the performance of and approving the compensation of the senior executives of the
Corporation and the Chief Executive Officers of its subsidiaries, after giving consideration to the
recommendations of the Human Resources Committee;
(w)
selecting nominees for election as Directors;
(x)
working to ensure that new Directors are provided with adequate education and orientation
opportunities, understand the role of the Board and its Committees, the expectations of time and
contribution from an individual Director and gain a general understanding of the Corporation’s business;
(y)
provide continuing education opportunities for Directors to ensure their knowledge of the Corporation’s
business stays current and to maintain or enhance their directorial skills;
(z)
selecting the Board Chair and developing his or her position description;
(aa)
appointing the officers of the Corporation;
(bb)
overseeing financial reporting and disclosure of the Corporation to obtain reasonable assurance that:
(i)
the Corporation complies with all applicable laws, regulations, rules, policies and other
requirements of governments, regulatory agencies and stock exchanges relating to financial
reporting and disclosure;
(ii)
the accounting policies and practices, significant judgments and disclosures which underlie or
are incorporated in the Corporation’s financial statements are the most appropriate in the
prevailing circumstances;
(iii)
the Corporation’s quarterly and annual financial statements are accurate and present fairly the
Corporation’s financial position and financial performance in accordance with International
Financial Reporting Standards (“IFRS”);
(iv)
there is an effective system of internal controls; and
COGECO INC.
18
(v)
appropriate information including Management’s Discussion and Analysis, concerning the
financial position and performance of the Corporation is disseminated to the public in a timely
manner.
(cc)
evaluating the experience of the various Directors with a view to selecting as members of the Audit
Committee Directors that have the qualifications described in the Charter of the Audit Committee;
(dd)
approving projects requiring a capital investment and other outlays in excess of a certain threshold;
(ee)
developing, through the Corporate Governance Committee, the Corporation's approach to corporate
governance issues including principles and guidelines that are relevant to the Corporation;
(ff)
establishing Committees to facilitate the carrying out of the Board’s mandate and approving their
respective charters and material changes thereto; and
(gg)
appointing the members of the Committees, designating for each Committee one of the members as
Chair and developing a position description for each Chair.
5.
BOARD COMMITTEES
5.1. NUMBER, STRUCTURE AND JURISDICTION OF COMMITTEES
The Board is responsible for the establishment of all Board Committees, the appointment of members on such
Committees, their qualification, compensation and their good standing. The Board has established four standing
Committees which are: the Audit, the Corporate Governance, the Human Resources and the Strategic
Opportunities Committees, and delegates certain of its duties and responsibilities to them. Other Committees or
sub-Committees may be established on an ad hoc basis from time to time by Board resolution to deal with
particular matters.
5.2. INDEPENDENT COMMITTEE MEMBERS
Members of the Audit, the Human Resources and the Corporate Governance Committees must be comprised of
members who are independent as defined according to applicable securities laws and regulations.
5.3. COMMITTEES REPORT TO BOARD
Each Committee generally reports to the Board after each Committee meeting.
6.
ADMINISTRATIVE MATTERS
6.1. COMPENSATION
The Human Resources Committee of the Board regularly reviews and makes recommendations on senior
executive compensation as well as that for the Directors, Board Chair and Committee Chairs and administers
stock option, incentive share unit, performance share unit and deferred share unit and other compensation plans.
Any proposed change to such compensation must be approved by the Board.
6.2. PART OF DIRECTORS FEES PAID IN DEFERRED SHARE UNITS
In order to encourage alignment of the interests of Directors with those of the shareholders, Directors have the
opportunity to receive all or a portion of their retainer in the form of DSUs.
6.3. BOARD CONFIDENTIALITY
Directors will maintain the absolute confidentiality of the deliberations and decisions of the Board of Directors and
information received at meetings, except as may be specified by the Board Chair or if the information is publicly
disclosed by the Corporation.
COGECO INC.
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6.4. REFERENCE MATERIALS
Reference materials that include, among other things, the Corporation’s articles, by-laws, annual reports, annual
information forms and other disclosure documents, principal plans or policies, mandates and Code of Ethics are
posted on the electronic portal of the Corporation and updated as necessary.
7.
RESOURCES AND AUTHORITY OF THE BOARD
The Board shall have the resources and authority appropriate to discharge its duties and responsibilities,
including access to Management and the authority to retain counsel or other experts, as it deems appropriate,
without seeking approval of Management.
COMPOSITION OF THE BOARD
The Board of Directors will be composed of eight Directors after the Meeting. Following a detailed review conducted
by its Corporate Governance Committee, the Board has determined that seven of the eight nominees as Directors,
representing a substantial majority of the Directors, are independent Directors and have no direct or indirect material
relationship with the Corporation as described in National Instrument 52-110 – Audit Committees of the Canadian
Securities Administrators (“CSA”). To assist the Corporate Governance Committee and the Board with their
determination, all nominees as Directors complete, on an annual basis, a detailed questionnaire about their business
relationships and shareholdings. The responses include, in the case of David McAusland, disclosure of his
partnership in McCarthy Tétrault LLP which is one of the several legal firms, albeit not the main firm, providing
services to the Corporation and Cogeco Cable, but Mr. McAusland is not involved, directly or indirectly, in the
provision of the services. The seven independent Directors, upon their re-election, are Elisabetta Bigsby, Pierre L.
Comtois, Paule Doré, Claude A. Garcia, Normand Legault, David McAusland and Jan Peeters. Mr. Louis Audet who
is the President and Chief Executive Officer of the Corporation and a Director and one of the shareholders of Gestion
Audem inc., which is the controlling shareholder of the Corporation, is, accordingly, not considered to be an
independent Director.
The Corporation, therefore, complies with the corporate governance guidelines set out in National Policy 58-201
– Corporate Governance Guidelines and National Instrument 58-101 – Disclosure of Corporate Governance
Practices (the “Corporate Governance Guidelines”) which stipulate that the Board of the Corporation should have a
majority of independent Directors.
The following table sets out the independence status of the eight nominees as Directors:
Independence Status
Nominees as Directors
Louis Audet
Elisabetta Bigsby
Pierre L. Comtois
Paule Doré
Claude A. Garcia
Normand Legault
David McAusland
Jan Peeters
Independent
Not
Independent
√
Reason for non-independence status
President and Chief Executive Officer of the Corporation and
a Director and shareholder of Gestion Audem inc.
√
√
√
√
√
√
√
BOARD DIVERSITY
We believe that increasing the diversity of our Board to reflect the communities and customers we serve is essential
to our success. In the context of gender, the Board’s policy is to maintain substantial representation of women on the
Board and it is receptive to increasing that level as Board turnover occurs from time to time and a strong woman
candidate or candidates are identified, taking into account the skills, background, experience and knowledge desired
at that particular time by the Board and its Committees. That has occurred this year and it is to be noted that,
following the Meeting, if re-elected, two of the eight nominees are women who will hold 25% of the seats on the
Board. Since early 2012, the Corporation has had women holding one quarter of the Board seats, which is a
significantly higher proportion than prevails on the boards of most Canadian public issuers. The Canadian Board
COGECO INC.
20
Diversity Council in its 2014 Annual Report Card stated that women now hold 17.1% of FP 500 board seats which,
while an increase over each of the prior two years, is lower than the current 25% level of the Corporation.
The Board is fully committed to ensuring that women are well represented on the Board in keeping with the
aforementioned criteria. The Corporation regards involvement of women on the Board and their experience and
inputs as constructive to the Board sessions and Board decision-making.
MAJORITY VOTING FOR DIRECTORS
The Board has adopted a Majority Voting Policy which requires that any nominee for Director who fails to receive at
least a majority of the votes cast for his or her election, treating for such purpose a “withhold” vote as a vote against
such election, shall tender his or her resignation to the Board Chair promptly following the meeting at which he or she
is elected.
The Corporate Governance Committee will consider the resignation offer and will make a recommendation to the
Board within 90 days whether to accept it. The Board of Directors will promptly disclose its decision, via press
release. A Director who tenders a resignation pursuant to this policy will not participate in any meeting of the
Corporate Governance Committee or the Board of Directors at which the resignation is considered.
This policy applies only to uncontested elections, meaning elections where the number of nominees for Directors is
equal to the number of Directors to be elected upon such election as determined by the Board. A copy of this policy
can be found on COGECO’s web site at www.cogeco.ca/cgogovernance.
PUBLIC BOARD MEMBERSHIPS
Nominees as Directors who are Directors of another issuer that is a reporting issuer in a Canadian or a foreign
jurisdiction are identified above under the heading “Information concerning Nominees as Directors”.
INTERLOCKING DIRECTORSHIPS
No nominee as Director currently serves with any other Director of the Corporation on the board of another company
outside the COGECO group of companies that is a public issuer.
BOARD CHAIR
The Board Chair is a duly elected member of the Board of Directors and is appointed as Chair of the Board by the
Board each year for a one-year term, with such appointment being (except when a vacancy is being filled) at the first
meeting of the Board following the annual meeting of shareholders. The Board Chair is an independent Director as
such term is defined in National Instrument 52-110.
The responsibilities of the Board Chair are set out in the position description below:
BOARD CHAIR POSITION DESCRIPTION
The Board Chair of COGECO is appointed to office and has the responsibilities and specific duties
described below.
APPOINTMENT
The Board Chair will be a duly elected member of the Board of Directors and be appointed as Chair of the
Board by the Board each year for a one-year term, with such appointment being (except when a vacancy is
being filled) at the first meeting of the Board following the annual meeting of shareholders. The Board Chair
will be independent as defined according to applicable securities laws and regulations. He or she will have
such competencies and skills as may be determined by the Board.
RESPONSIBILITIES
The Board Chair provides leadership to the Board. The Board Chair sets the “tone” for the Board and the
Directors to foster effective, ethical and responsible decision-making, appropriate oversight of Management
COGECO INC.
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and strong corporate governance practices. The Board Chair is an ex officio member of the standing Board
committees.
SPECIFIC DUTIES
In addition to individual Director’s responsibilities, responsibilities set out in the Board Charter and specific
duties assigned by the Board from time to time, the Board Chair will:
GOVERNANCE
1.
Generally oversee Board direction and administration, ensuring that the Board works as a cohesive
team and building a strong governance culture.
ETHICS
2.
Foster ethical decision-making by the Board in accordance with the Corporation’s Code of Ethics.
LEADERSHIP
3.
Provide leadership to enhance the effectiveness of the Board.
4.
Provide the Board, the Board Committees and individual Directors with leadership to assist them to
effectively carry out their duties and responsibilities.
5.
Provide advice and counsel to the Chief Executive Officer, Committee Chairs and fellow Directors.
6.
Maintain an effective working relationship with the Chief Executive Officer.
7.
Ensure that the responsibilities of the Board, as set out in the Board Charter, are well understood by
Directors.
8.
Work with the Chief Executive Officer and senior Management to monitor progress on strategic planning
and implementation.
BOARD MEETINGS
9.
With the President and Chief Executive Officer, the Corporate Secretary and other members of
Management, as appropriate, establish the agenda for, call meetings of the Board and chair each Board
meeting.
10. Ensure that the Board meets at least five times annually and as many additional times as may be
necessary to carry out its duties effectively.
11. Ensure, in concert with Management and the Corporate Secretary, that Directors receive information
that is timely, in a useful format and of high quality.
12. Encourage the Committees and Committee Chairs to bring important issues forward to the Board for
consideration and resolution.
13. Ensure there is sufficient time during Board meetings to discuss fully the agenda items and facilitate
discussion on all business set out in the agendas of Board meetings, seeking to bring matters to
resolution, as required.
14. Encourage individual Directors to ask questions and express viewpoints during meetings.
15. Ensure that the Board meets in camera at each of its meetings, unless waived at a particular meeting
by independent Directors.
SHAREHOLDER MEETINGS
16. Ensure that the shareholders meet at least once annually and as many additional times as is required
by law.
17. Except as otherwise authorized by the By-Laws, chair all annual meetings and special meetings of
shareholders.
COGECO INC.
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18. Ensure that all business set out in the agenda of each shareholder meeting is discussed and brought to
resolution, as required.
BOARD/MANAGEMENT RELATIONSHIPS
19. Ensure that the boundaries between Board and Management responsibilities are clearly understood
and respected and that relationships between the Board and Management are conducted in a
professional and constructive manner.
20. Facilitate effective communication between Directors and Management, both inside and outside of
Board meetings.
21. Work with and assist the Chief Executive Officer and Chief Financial Officer in representing the
Corporation’s interests to its external stakeholders such as shareholders and other security holders, the
investment community, the media and customers.
DIRECTOR RECRUITMENT AND RETENTION
22. With the Human Resources Committee, participate in the recruitment and retention of Directors.
EVALUATION
23. Conduct an annual evaluation of performance and effectiveness of the Board, Board Committees, all
individual Directors and Committee Chairs, other than that of the Board Chair, and review the results
with the Corporate Governance Committee.
24. Ensure that an annual performance evaluation of the Board Chair is conducted, soliciting input from all
Directors, and that the results are reviewed with the Chair of the Corporate Governance Committee.
ORIENTATION/EDUCATION
25. Facilitate the orientation of new Directors.
26. Facilitate the continuing education of all Directors.
OTHER
27. Assist in the annual review of the Board Charter.
28. Carry out such other duties and responsibilities as may be assigned by the Board.
BOARD OPERATIONS
The Directors are expected, subject to scheduling conflicts, to attend in person, to the extent feasible, all meetings of
the Board and Committees on which they sit (other than conference call meetings). Annual Board and Board
Committee meeting schedules are provided to Directors in advance and are updated on an ongoing basis. Directors
are asked to notify the Corporation if they are unable to attend, and attendance at meetings is duly recorded. The
attendance of Directors at Board and Committee meetings for the last fiscal year is provided below under the heading
“Attendance Record”.
Financial and other information that is important to the understanding of agenda items is made available to Directors
several days before scheduled Board meetings to facilitate Directors’ preparation for meetings. Apart from the
President and Chief Executive Officer, who is a member of the Board and participates as such, the Board invites
members of Management to attend parts of Board meetings for reporting and informational purposes.
COGECO INC.
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ATTENDANCE RECORD
The following table sets forth the attendance of the current Directors at Board and Committee meetings held during
the last fiscal year:
Board Meetings Attended
Director
#
%
Audit
Elisabetta Bigsby
Pierre L. Comtois
Paule Doré
6 of 6
6 of 6
6 of 6
6 of 6
100%
100%
100%
100%
5 of 5
5 of 5
Claude A. Garcia
6 of 6
100%
5 of 5
Normand Legault
6 of 6
100%
David McAusland
6 of 6
100%
6 of 6
100%
Louis Audet
(1)
Jan Peeters
(1)
Committee Meetings Attended
Human
Corporate
Resources
Governance
Total Committee
Meetings Attended
Strategic
Opportunities
—
4 of 4
4 of 4
2 of 2
2 of 2
4 of 4
2 of 2
5 of 5
4 of 4
2 of 2
—
—
—
—
#
—
%
8 of 8
8 of 8
6 of 6
N/A
100%
100%
100%
8 of 8
100%
—
N/A
3 of 3
100%
11 of 11
100%
Mr. Peeters is entitled to attend as an observer and to participate in all standing Board Committees.
As is apparent from the above table, the Directors demonstrated a strong commitment to their roles and
responsibilities through a 100% attendance rate at Board and Committee meetings.
INDEPENDENT CHAIRMAN
Mr. Peeters, the Chairman of the Board, is an independent Director. In such capacity, he, among other things,
develops the agenda for Board and shareholders meetings in consultation with Management, oversees information
being made available to Board members, sets the tone for corporate governance at the Board level with a view to
assuring Board effectiveness, facilitates the Board meeting independently of Management representatives, co-leads
with the Chair of the Corporate Governance Committee the annual evaluation of the Board and its Committees and
enables communications between the independent Directors and Management.
As a matter of policy, the Board meets in camera at each of its meetings without any member of Management
present to ensure free and open discussion among the non-Management Directors, unless waived at a particular
meeting by independent Directors.
INDIVIDUAL DIRECTOR MANDATE
All the Directors of the Corporation are required to exercise their duties and responsibilities in the best interests of the
Corporation with due regard for the interests of its shareholders generally and other stakeholders. The expectations
and responsibilities of Directors are described in an individual Director mandate. In addition to appointment and
resignation from office, term, attendance, and minimum share and/or DSU ownership expectations, the mandate sets
forth elements of an individual Director’s duties relating to fiduciary duties, ethics and integrity, governance,
contribution, independence, continuing education, disclosure and other matters.
Consistent with best corporate governance practices, a Director is expected to accumulate subordinate shares of the
Corporation and/or DSUs with a total value equivalent to at least three times the basic annual retainer payable to
Directors. See the heading “Director Share and Deferred Share Unit Ownership” on page 40. The Human Resources
Committee monitors compliance with this policy.
DECISIONS REQUIRING BOARD APPROVAL
All major decisions concerning, among other things, the Corporation’s corporate status, capital expenditures and
development projects, debt financing, securities, distributions, investments, acquisitions, divestitures and strategic
alliances, are subject to approval by the Board. In particular, each capital and other expenditure of a monetary
amount of $5,000,000 or more is subject to the prior approval of the Board.
COGECO INC.
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COMMITTEES
The Board is responsible for the establishment and operation of all Board Committees, the appointment of members
to serve on such Committees, their compensation and their good standing.
The Board has established four standing Committees to facilitate the carrying out of its duties and responsibilities and
meet applicable statutory and policy requirements. The Committees are currently comprised of the following
Directors:
Director
Louis Audet
Elisabetta Bigsby
Audit Committee
Human Resources
Committee
√
Chair
Pierre L. Comtois
Paule Doré
Claude A. Garcia
Normand Legault
David McAusland
Jan Peeters
Chair
√
√
√
Corporate Governance
Committee
Strategic Opportunities
Committee
√
√
Chair
√
√
√
Chair
Entitled to attend as an observer and to participate in any of these standing Committees
The Board usually appoints the members of the Committees at the first meeting of the Board following the annual
meeting of shareholders. To see the composition of the Committees after the Meeting, you can visit the Corporation’s
web site at www.cogeco.ca/cgogovernance.
The Board has also developed detailed position descriptions for the Chair of each Committee. Each position
description outlines the appointment and qualification requirements, as well as the broad responsibilities of the Chair
and identifies specific duties in areas such as leadership, integrity, governance, Committee management and
organizational effectiveness. The position descriptions are reviewed from time to time by the Corporate Governance
Committee.
AUDIT COMMITTEE
The Audit Committee is comprised of three Directors who satisfy the independence requirements as set out in
National Instrument 52-110. All the members of the Committee are “financially literate” and have the ability to read
and understand a set of financial statements that present a breadth and level of complexity of accounting issues that
are generally comparable to the breadth and complexity that can reasonably be expected to be raised by the
Corporation’s financial statements.
The Audit Committee meets on a quarterly basis and holds special meetings as circumstances require. The Audit
Committee meets in camera at each regular meeting, without any member of Management present.
The Audit Committee has a formal charter setting out its mandate and responsibilities. The text of the charter and
other information relating to the Audit Committee required by Form 52-110F1 on audit committees can be found in
Section 14 of the Corporation’s Annual Information Form for 2014.
The Audit Committee is established by the Board for the purpose of overseeing the accounting and financial reporting
processes and internal controls and reviewing the consolidated financial statements of the Corporation and other
financial information as well as overseeing the selection of the external auditors and the audit process.
The Audit Committee fulfills its responsibilities within the context of the following major principles and guidelines:

The Committee Chair and the other Audit Committee members have direct, open and frank communications
throughout the year with Management, other Committee chairs and Board members, the external auditors, the
Vice President, Internal Audit and Risk Management and other key Committee advisors as applicable;

The Committee, in consultation with Management and the external auditors, develops annually an Audit
Committee Work Plan responsive to the Audit Committee’s responsibilities as set out in its charter;
COGECO INC.
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
The Committee, in consultation with Management and the external auditors, participates in a process for review
of important financial topics and emerging standards that have the potential to impact the Corporation’s
consolidated financial presentation and disclosure;

The Committee reviews the Corporation’s principal business risks and oversees the implementation by
Management of appropriate measures to manage these risks;

The Committee communicates its expectations to Management and the external auditors with respect to the
nature, timing and extent of its information needs. The Committee expects that written materials will be received
from Management, the Vice President, Internal Audit and Risk Management and the external auditors and
posted on the electronic portal of the Corporation one week in advance of meeting dates for all the topics on the
agenda;

The external auditor’s ultimate responsibility is to the Board of Directors and the Audit Committee, as
representatives of the shareholders. The external auditors must report directly to the Audit Committee;

The Committee may, in addition to the external auditors, at the expense of the Corporation and after consultation
with Management, engage independent counsel or other advisors, which the Committee determines, are
necessary to carry out its duties.
The Senior Vice President and Chief Financial Officer, the Vice President, Internal Audit and Risk Management and
representatives of the external auditors usually attend all Audit Committee meetings.
Responsibilities and duties of the Audit Committee are set out in its charter in relation to financial reporting, changes
in accounting policies, assessing financial risks and uncertainties, financial controls and deviations, compliance with
tax and financial reporting laws, relationships with the external auditors and the internal audit group and other
matters. These duties and responsibilities of the Audit Committee are consistent with National Instrument 52-110 and,
in many aspects, with the best practices of the industry.
Based on the recommendations of the Chartered Professional Accountants of Canada and the Canadian Public
Accountability Board, the Audit Committee undertook in 2014 to perform a comprehensive review of the External
Auditors not less often than every five years.
As required in National Instrument 52-110, the Audit Committee has established whistle-blowing procedures, which
are embodied in the Code of Ethics of the COGECO Group, for complaints regarding accounting or auditing matters.
Under these procedures, any complaint submitted raising suspicions or concerns regarding accounting or auditing
matters and the identity of the reporter will be kept confidential, to the fullest extent possible, within the limits imposed
by law and consistent with the need to conduct a thorough investigation. Reporters will be protected from dismissal or
retaliation of any kind for reporting in good faith suspicions or concerns regarding accounting or auditing matters.
Significant reports relating to accounting or auditing matters are raised promptly with the Chair of the Audit
Committee by the Vice President, Internal Audit and Risk Management. Internal Audit otherwise informs the Audit
Committee on a quarterly basis on the number and scope of any reports that may be received relating to these
matters. The Chair of the Audit Committee then informs the Board of any significant report received.
HUMAN RESOURCES COMMITTEE
The Human Resources Committee serves in the roles of compensation and human resources committee and of
nominating committee. It is currently comprised of three Directors who are independent, as such term is defined in
National Instrument 52-110. The Human Resources Committee meets at least three times yearly. The members of
the Committee meet in camera at each meeting without any member of Management present, unless waived at a
particular meeting by its members.
The Human Resources Committee has a formal charter setting out its duties and responsibilities. They include,
among other things, the following responsibilities:

to establish the Corporation's approach to executive compensation, in consultation with Management and
external independent consultants;
COGECO INC.
26

to review and make recommendations to the Board on the general compensation structures of the Corporation,
including its subsidiaries and controlled entities;

to review the compensation of senior executive officers of the Corporation, including those of its subsidiaries and
controlled entities, such compensation consisting of base salary, short-term incentive plan (annual bonus) and
the long-term incentive program (stock option, incentive share unit and performance share unit plans) in line with
corporate policies in effect and stated budget and other objectives;

to review the performance and make recommendations to the Board on the suggested level of and/or changes in
the overall compensation of other senior executive officers of the Corporation and of the Chief Executive Officers
of its subsidiaries, taking into consideration individual performance and competitive compensation practices;

to make recommendations to the Board on any new incentive plan or on any material change to the
Corporation’s short-term and long-term incentive plans and to discharge any responsibilities imposed on the
Committee by these plans;

to review and make recommendations to the Board on special conditions applying to senior executive officers of
the Corporation and its subsidiaries such as the Senior Management Special Remuneration Plan, in the event of
a change in control of the Corporation;

to review annually the extent to which designated senior executives and Directors are meeting the minimum
shareholdings expectations through shares, incentive share units, performance share units or deferred share
units;

to review periodically trends and developments in the pension area in North America and other jurisdictions
where the Corporation has operations and make recommendations to the Board on all pension retirement plans
of the Corporation, including its subsidiaries and controlled entities, and on any material amendments to these
plans;

to review and approve the Pension Plan Governance Policy and any material changes thereto;

to receive reports from the Pension Advisory Committee;

to monitor and review, as appropriate, the administration, funding and investment of the retirement plans of the
Corporation, including its subsidiaries and controlled entities;

to review annually the status of labour relations;

to review annually Human Resources key performance indicators;

to review annually health and safety indicators;

to review the results of employees surveys;

to ensure that the Corporation has in place the proper processes to deal with the succession of senior executive
officers and Directors;

to make recommendations to the Board on appointments of senior executive officers of the Corporation;

to administer, when authority is delegated to it by the Board, stock options, incentive share units, performance
share units, deferred share units and other compensation plans;

to review and assess proposals for new Board candidates submitted by the ad hoc committee composed of the
Board Chair, the Chairs of the Human Resources and Corporate Governance Committees and the President and
CEO of the Corporation to bring the proposed candidates as Directors forward to the Corporate Governance
Committee so that it assesses the proposal for each new Board nominee, and to submit the proposed candidates
as Directors to the Board before they are submitted to shareholders;
COGECO INC.
27

to make recommendations to the Board on the compensation of the Directors, the Board Chair and Committee
Chairs;

in the event of an impending vacancy in the office of the Board Chair, to review and to bring the proposed
candidate forward to the Board;

in the event of an impending vacancy in the office of the President and Chief Executive Officer, to review and to
bring the proposed candidate forward to the Board;

to review, when authority is delegated to it by the Board, any specific risk facing the Corporation, including its
subsidiaries and controlled entities, in the compensation and human resources sector and oversee the
implementation by Management of appropriate systems to manage these risks;

to review and approve the compensation discussion and analysis included in the Corporation’s Information
Circular;

to review other information on executives and Directors’ compensation included in the Corporation’s Information
Circular;

in consultation with Management, to retain, if required, the services of an outside compensation consultant to
advise on the compensation of senior executive officers of the Corporation, including its subsidiaries and
controlled entities, and to fix such consultant’s fees and terms of retention;

pre-approve annually the budget for the non-executive compensation services to be provided by the same firm
that provides executive compensation consulting services; and

to review and reassess annually the adequacy of its charter and to recommend any changes to the Board.
CORPORATE GOVERNANCE COMMITTEE
The Corporate Governance Committee is comprised of three Directors who are independent, as such term is defined
in National Instrument 52-110. The members of the Committee meet in camera at each meeting without any member
of Management present, unless waived at a particular meeting by its members. The Committee has a formal charter.
The responsibilities and duties of the Corporate Governance Committee include, among other things:

to review the corporate governance practices of the Corporation in the context of its global business and affairs;

to examine the adequacy and effectiveness of the Board’s corporate governance practices in light of changing
regulatory requirements and make suggestions for their improvement;

to oversee the size and composition of the Board and its Committees and provide advice to the Board in this
regard;

to advise the Board on the competencies and skills the Board as a whole, and individual Directors should
possess in the context of the Corporation’s global business and affairs and determine what competencies, skills
and personal qualities that should be sought in candidates as Directors;

to assess proposals for new Board candidates before they are submitted to the Board by the Human Resources
Committee;

to advise on the appropriateness of any resignation that may be offered by a Director under the Majority Voting
Policy;

to assess the quality and effectiveness of the Board’s relationship with Management;

to recommend topics of interest or importance for discussion and/or action by the Board and address information
requirements of the Directors;
COGECO INC.
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
to review annually the Board and Committee effectiveness including contribution by individual Board or
Committee members, continuing qualification and any potential conflict of interest;

to review annually the charters, position descriptions and policies relating to corporate governance matters;

to monitor compliance with the Code of Ethics and authorize, where appropriate, waivers of compliance for the
benefit of any Directors or executive officers of the Corporation;

to review the Privacy Policy and any material change to it and recommend its adoption by the Board;

to review the Insider Trading Policy and any material change to it and recommend its adoption by the Board;

to review the Corporate Social Responsibility (“CSR”) Policy and any material change to it and recommend its
adoption by the Board;

to receive reports, on a bi-annual basis, on CSR and related initiatives;

to approve the engagement by a Director of an outside legal or other advisor at the expense of the Corporation;
and

to review and reassess annually the adequacy of its charter and to recommend any changes to the Board of
Directors.
STRATEGIC OPPORTUNITIES COMMITTEE
The Strategic Opportunities Committee is currently comprised of five Directors, four of whom are independent as
such term is defined in National Instrument 52-110. The Committee meets at the call of the Chair. The members of
the Committee meet in camera at each of its meetings without any member of Management present, unless waived
at a particular meeting by its members. The Committee is not charged with oversight of strategic planning and
direction, which remain the purview of the Board. However, the Committee facilitates earlier discussion with
Management in relation to strategic opportunities or acquisitions being considered. It enables the Committee to add
its views and provide guidance on the type of analysis and information that the Board will require in order to consider
approval of an acquisition.
The responsibilities and duties of the Strategic Opportunities Committee include, among other things:

to provide a forum in which the Chief Executive Officer, alone or with other members of senior Management, can
present preliminary thinking or planning on strategic opportunities or proposed material acquisitions and receive
advice and counsel from the Committee in the formative stages of developing recommendations for
consideration by the Board;

on request by Management, to establish tentative parameters and guidelines for pursuing of any such strategic
opportunities or proposed material acquisitions;

to consider and assess on its own initiative strategic opportunities and provide suggestions and inputs to
Management; and

to review and reassess when needed the adequacy of its charter and to recommend any changes to the Board.
The charters of the Board, Audit Committee, Human Resources Committee, Corporate Governance Committee and
Strategic Opportunities Committee as well as the individual Director Mandate are available on the Corporation’s
web site at www.cogeco.ca/cgogovernance.
CORPORATE SOCIAL RESPONSIBILITY
COGECO has designed a CSR program aimed at conducting all its operations in a productive and sustainable
manner. Concretely, this means we take into consideration the three dimensions of corporate social responsibility
which are environmental, social and economic. The Cogeco Group Code of Ethics together with the CSR Policy, form
COGECO INC.
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the framework of our CSR program. This Policy enables the Corporation to develop, strengthen and align a culture of
sustainability and encourage growth and profitability in all our business units.
The CSR policy integrates the Corporation’s corporate social responsibility objectives articulated around six pillars:

Managing our environmental footprint

Taking part in developing communities

Taking part in developing our employees

Integrating the best CSR practices

Being transparent in communicating our CSR activities

Fostering the Corporation’s growth sustained by sound governance practices
The Corporate Governance Committee reviews the CSR Policy and any material change thereto and recommends its
approval by the Board. The Vice-President Internal Audit and Risk Management is responsible for communicating
and overseeing the Policy. This is supported by a Steering Committee composed of executives from the Corporation
and its business units.
The Corporation believes that its subsidiaries, namely Cogeco Cable’s cable and enterprise data services businesses
and Cogeco Diffusion radio and out-of-home advertising businesses, have a smaller environmental impact when
compared with many other industries. Notwithstanding, the Corporation is committed to progressively reducing the
environmental footprint of the companies in respect of the communities in which they operate and achieving an
improved balance among their environmental, social and economic objectives.
Notably, Cogeco Cable obtained the BOMA BESt certification for the Trois-Rivières location, our largest facility in
Québec. This certification recognizes the good environmental practices implemented over the past years, including
energy, waste and water management, pollution control and environmental health and safety programs.
Cogeco Cable also gained a place on a new ranking launched in 2014 by Corporate Knights, The Future
th
40 Responsible Corporate Leaders in Canada. The Corporation holds the 24 position. Corporate Knights selected
Cogeco Cable on the basis of its performance relative to 12 indicators measuring social and environmental
performance and corporate governance.
In addition, Cogeco Cable is part of the Jantzi Social Index, consisting of 60 Canadian companies that passed a set
of broadly based environmental, social and governance rating criteria. The highly regarded index ranks Cogeco
Cable in the top quartile of its peer group.
We are very proud of these recognitions. They underscore our efforts in integrating the best CSR practices in our
initiatives and to be a model of good corporate citizenship. They also provide further incentive for our Corporation to
continue to perform in matters of corporate social responsibility, in order to reduce our overall environmental footprint
and to make a positive difference within and outside our organization. To learn more about Cogeco Cable’s
objectives, initiatives and performance in the areas of corporate social responsibility, please consult our 2013 CSR
report, available in the social responsibility section of our corporate web site at www.cogeco.ca.
STRATEGIC PLANNING
The Board provides oversight and direction in the strategic planning process for the Corporation with a view to
ensuring that Management develops and implements appropriate corporate strategies. Management has the primary
responsibility of bringing forward and recommending a strategic plan. Management is expected to explain the
strategic options available to the Corporation, along with the key thrusts of the plan.
The Board generally holds a two day session each year specifically focused on strategic planning, together with input
from senior Management of the business units as well as external experts on relevant subjects. This format allows for
in depth discussion and consideration of risks and opportunities and specific strategic imperatives.
COGECO INC.
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The Board monitors Management’s progress in following the strategic plan during the year and discusses matters
relating to the Corporation’s business interests and strategy. Management also reports at each regular Board meeting
on matters of operational and financial performance, financing and investor relations.
DIRECTOR RECRUITMENT AND SKILLS
As indicated in the charter of the Board above, the Corporate Governance Committee advises the Board on the
appropriate size of the Board as well as the competencies and skills that the Board, as a whole, and individual
Directors, should possess in the context of the Corporation’s business and affairs and determines the competencies,
skills and qualities that should be sought in candidates as Directors. The objective of the Corporate Governance
Committee is to maintain the composition of the Board so as to be strongly independent and such as to optimize its
mix of skills, experience and other factors and to encourage strong guidance of the Corporation in its ongoing
business operations and longer term strategy. This process is assisted by a peer to peer assessment of Directors that
the Board undertakes every year, under the leadership of the Board Chair and the Chair of the Corporate
Governance Committee that may identify any potential gap in skills or experience.
For experience and skills possessed by the nominees for Directors at the Meeting, please see the biographies for
each set out under “Business to be Transacted at the Meeting - Election of Directors” and, for members of the Human
Resources Committee, as referred to under “Compensation Discussion and Analysis”.
Unless otherwise determined by the Board, when a Director is being recruited, an ad hoc committee composed of the
Board Chair, the Chairs of the Human Resources and Corporate Governance Committees and the President and
CEO of the Corporation initiates the process by seeking input and suggestions from individual Board members and
conducts a search with the assistance of a professional search firm.
The ad hoc Committee takes into account the qualities or experience that a candidate should possess and that may
include such considerations as educational background, any special training of relevance, business experience in or
outside the cable, telecom and media sectors, national or international exposure, directorial experience, integrity,
diversity and other factors. Diversity is an essential consideration in the selection process for directors. When
considering diversity, the ad hoc Committee considers personal characteristics such as age, gender, ethnicity and
geographic background. When there was a need in recent years to recruit potential candidates to fulfill a seat on the
Board of Directors of the Corporation, one fundamental element of the candidate profile has been to identify qualified
women but while doing so, taking into account the skills, expertise and experience desired at that particular time by
the Board and its Committees. The last two candidates nominated for election to the Board of the Corporation were
women.
Against that backdrop of considerations, the ad hoc committee considers the ability of the proposed candidate to
contribute to Board and Committee meetings and brings the proposed candidate forward to the Human Resources
and Corporate Governance Committees for assessment prior to his or her submission to the Board. The Board
approves the final choice of candidates for nomination and proposed election by shareholders.
EXECUTIVE OFFICER RECRUITMENT
The Corporation is committed to ensuring that its workforce reflects the diversity of the communities in which it lives
and does business. As such, the Corporation has an Employment Equity Policy which supports and encourages
the hiring and advancement of women, visible minorities, aboriginal people and persons with disabilities.
The Board and Management also regard the recruitment of qualified women to executive positions within the
Corporation and its subsidiaries as of continuing importance to the effective make-up of the executive ranks. In
considering fulfilment of executive roles, the Corporation is sensitive to the value of having a good representation of
both genders. Currently, 5 of the 10 (50%) corporate officers of the Corporation are women. Importantly, from fiscal
2013 to the date of this Information Circular, 50% (9 out of 18) of the promotions at the executive officer at the level of
the Corporation, Cogeco Cable and Cogeco Cable Canada were female. The role played by women within our
organization, and their presence in senior positions, are of paramount importance. The Corporation is proud of this
representation and will pursue its efforts to promote the advancement of women. The Corporation regards a high
level of Board and executive representation of women as being in the best interests of employees, customers,
suppliers and shareholders.
Louise St-Pierre, the President and CEO of Cogeco Cable Canada, promoted to such position in fiscal 2013, recently
accepted on its behalf, the Company of the year Award from Women in Communications and Technology.
This distinction underscores the company’s leadership efforts in supporting the advancement of women in the
COGECO INC.
31
communications and technology industry. Ms. St-Pierre also received this year the “Mercure Leadership
Germaine-Gibara” Award at the the 34th edition of the Mercuriades, Quebec’s most prestigious business awards,
which recognizes the contributions of exceptional businesswomen who, like Ms. Gibara, have distinguished
themselves through their career-long boldness and vision.
ORIENTATION AND CONTINUING EDUCATION
All new Directors receive a comprehensive orientation. Before agreeing to be nominated for the Board, they are
advised as to the anticipated workload and time commitment required. They meet with the Chairman of the Board
and with the President and Chief Executive Officer, the Corporate Secretary and senior Management and are briefed
on the role and responsibilities of the Board, its Committees and Directors and on the Corporation’s structure,
financial position, regulatory environment and other aspects of its business. New Directors have access to the
reference documents made available on the electronic portal of the Corporation which contain among other things the
charters of the Board and Committees, position descriptions, corporate policies, by-laws, the Code of Ethics of the
COGECO Group which also applies to the Directors, the Corporation’s insider trading policy, the individual Director
mandate setting out the expectations and responsibilities of Directors and the Corporation’s most recent disclosure
documents. New directors also have access to the strategic plan of the Corporation. This is consistent with the
Corporate Governance Guidelines and enables a new Director to better understand the Corporation and his or her
role and responsibilities.
As part of its commitment to continuing education, Management periodically gives all Directors up-to-date analyst
studies, industry studies and benchmarking information. Site visits to the Corporation’s facilities in Canada are
arranged from time to time. At each regular Board meeting, the Directors are also provided with regulatory updates
and short summaries of relevant orders, decisions and policies of the CRTC and other pertinent agencies. In
February of this year, all Directors attended to presentations on growth and innovation and on relevant industry
developments during the annual strategic planning retreat of the Corporation. They also attended in July of this year,
a special one-half day session focused on providing them with an update from the Corporation’ Senior Vice
President, Chief Technology and Strategy Officer on technological developments.
Extensive documentation and selected presentations by senior Management and external advisors are provided to
Directors at the annual two day strategic planning retreat of the Corporation, which all the Directors attend, to
enhance their knowledge and understanding of the Corporation’s business and outlook and to facilitate more
intensive consideration of the strategic plan. Strategic options are reviewed and assessed and opportunity is fostered
at that meeting for the introduction and discussion of ideas and initiatives from the individual Directors.
In addition, Directors of the Corporation are informed of relevant courses or educational events and are given the
opportunity to attend programs on corporate governance and Directors’ responsibilities, in some instances at the cost
of the Corporation to the extent reasonable. In the past year, individual Directors have attended several courses or
events offered by the Institute of Corporate Directors and major accounting firms and other organizations, with an
emphasis on telecommunications, media, accounting and corporate governance developments.
ASSESSMENTS
The Board Chair and Corporate Governance Committee Chair conduct an annual formal review of Board and
Committee effectiveness (including Directors’ individual contributions). They develop annually with the Corporate
Secretary a questionnaire which facilitates a written evaluation of the performance and effectiveness of the Board and
each of the Board Committees as well as peer to peer assessments based on broad areas of business knowledge
and work habits and self-assessments on the part of each individual Board member of his or her own skills and
qualifications. The questionnaire covers such matters as the operation of the Board and its Committees, the
adequacy and timeliness of the information provided to Directors, the effectiveness of meetings and performance of
Board and Committee members. The resulting information is analyzed by the Board Chair and Corporate
Governance Committee Chair who then report to the Corporate Governance Committee, which in turn reports to the
Board and identifies improvement opportunities. The Board Chair meets every year with each Director individually
which facilitates a discussion of the evaluation of his or her contribution and that of other Directors and other aspects
of the functioning of the Board.
Members of the Board are also asked in the questionnaire to assess and comment on the performance of the Board
Chair. Individual responses are received by the Chair of the Corporate Governance Committee who reviews the
results with the other members of the Corporate Governance Committee with the Board Chair, if present, withdrawing
from the meeting, and then provides a summary to the Board Chair and the Board.
COGECO INC.
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The results of the formal review conducted in 2014 showed that the Board and Committees are fulfilling their
mandates properly and that Directors are satisfied with the operations of the Board.
TENURE OF OFFICE
The Corporation does not have a fixed retirement age for Directors. In the view of the Board, obliging Directors to
retire at a fixed age could have the unfortunate impact of forcing a Director to retire who has gained great knowledge
of the Corporation’s business and affairs and who is still make a valuable contribution to the Board and relevant
Committees that he or she serves on. This policy is set forth in the Board of Directors Charter set out earlier in this
Information Circular. At the same time, the Board acknowledges that there is value to be had in refreshing Board
membership from time to time and making available to it new and innovative thinking and approaches and enhanced
experience and skills. Thus, the Board annually reviews its composition and effectiveness as is described under
“Director Recruitment and Skills”.
DISCLOSURE POLICY
The fundamental objective of the Corporation’s disclosure policy is to ensure timely and factual dissemination of
information to shareholders generally and the investment community respecting the business, affairs and
performance of the Corporation, subject to and in accordance with the requirements of securities legislation in effect
and other statutory and contractual obligations limiting the disclosure of such information. At the same time, the policy
sets the rules for protection of confidential information of all types and its appropriate disclosure. It extends to
Directors, officers and employees of the Corporation. The policy identifies material information relating to the
business and affairs of the Corporation disclosure of which would result in or would reasonably be expected to result
in a significant change in the market price or value of any of the listed securities of the Corporation.
Disclosure is approved by the Disclosure Committee which is comprised of the President and Chief Executive Officer,
the Senior Vice President and Chief Financial Officer and the Vice President, Corporate Affairs, Chief Legal Officer
and Secretary. The Disclosure Committee’s reports are received by the Audit Committee. The disclosure policy of the
Corporation is consistent with National Policy 51-201 - Disclosure Standards, and other applicable requirements.
In order to facilitate the effective and timely dissemination of information to all shareholders and the investment
community, the Corporation releases its disclosed information through newswire services, the general media, the
Internet, telephone conferences with investment analysts and mailings to shareholders. Disclosed information is
available in both official languages.
BOARD’S EXPECTATIONS OF CHIEF EXECUTIVE OFFICER AND MANAGEMENT
Generally, the Board expects, among other things, Management of the Corporation to meet the following basic
objectives:

report in a comprehensive, accurate and timely fashion on the global business and affairs of the Corporation and
on any specific matters that it considers of material consequence for the Corporation and its shareholders;

take timely action and make appropriate decisions required by the Corporation’s activities in accordance with
applicable requirements or obligations and within the framework of the corporate policies in effect, with a view to
enhancing shareholder value;

conduct a comprehensive annual budgeting process and monitor closely the Corporation’s financial performance
in conjunction with the annual budget presented to the Board;

identify, in conjunction with the Board, the principal risks facing the Corporation and implement appropriate
systems to manage these risks; and

review on an ongoing basis the Corporation’s strategies and their implementation in all key areas of the
Corporation’s activities in light of evolving technology, government regulation and market conditions.
The Board has developed, in concert with the President and Chief Executive Officer and the Board Chair, and
approved a detailed position description for the President and Chief Executive Officer and the corporate goals and
objectives for which the President and Chief Executive Officer is responsible. The position description of the
President and Chief Executive Officer is set out below.
COGECO INC.
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PRESIDENT & CHIEF EXECUTIVE OFFICER POSITION DESCRIPTION
The President & Chief Executive Officer (the “CEO”) of COGECO has the responsibilities and specific duties
described below.
APPOINTMENT AND QUALIFICATION
The CEO will be appointed by the Board as CEO of the Corporation for a one-year term, with such
appointment being (except when a vacancy is being filled) at the first meeting of the Board following the
annual meeting of shareholders. The CEO will have such competencies and skills as may be determined by
the Board.
RESPONSIBILITIES
The CEO provides effective leadership and vision for the Corporation, including its operating subsidiaries
and controlled entities; establishes current and longer term strategy, objectives and plans and monitors
performance under the guidance and supervision of the Board; manages all business acquisitions and
divestitures; and oversees the global business activities and affairs of the Corporation with the objective of
growing shareholder value and return on capital in a sustainable manner. The CEO provides the leadership
and sets the “tone” for Management to foster effective, ethical and responsible decision-making as well as
strong corporate governance practices.
SPECIFIC DUTIES
In addition to individual Director’s responsibilities, the CEO has specific duties in the following functional
areas:
LEADERSHIP
1.
Provide leadership and vision to senior executive officers of the Corporation and the chief executive
officers of its operating subsidiaries and controlled entities, all in the best interests of the Corporation
with due regard to its shareholders generally and other stakeholders.
2.
With the advice of the members of senior Management, develop the basic objectives and plans of the
business of the Corporation in the context of its global business affairs and submit these, as
appropriate, to the Board for its approval.
3.
Plan, direct and lead all investigations and negotiations pertaining to mergers, joint ventures, the
acquisition of businesses or the sale of major assets, subject to necessary Board approval and
appropriate prior consultations.
4.
Represent the Corporation as appropriate as the lead in its relationships with its external stakeholders
such as shareholders and other security holders, the investment community, the media, government
agencies, including the CRTC, major customers, suppliers and competitors.
ETHICS
5.
Foster ethical decision-making by Management in accordance with the Corporation’s Code of Ethics.
6.
Set the ethical tone for the Corporation and its Management, including: (i) satisfying the Board as to the
integrity of the Corporation’s senior executive officers and of the Chief Executive Officers of its
subsidiaries; (ii) demonstrating to the Board that the CEO and other senior officers of the Corporation
and the Chief Executive Officers of its subsidiaries create a culture of integrity throughout the
organization; and (iii) overseeing compliance with the Corporation’s charters, mandates and policies.
GOVERNANCE
7.
Communicate in a timely fashion with the Board Chair and the Board on material matters affecting the
Corporation.
8.
Provide input in developing the Board, Board Committee and individual Director Charters and
Mandates.
COGECO INC.
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9.
Provide input in developing the agendas for the Board and Committee meetings.
10. Assist the Board Chair in developing an orientation program for new Directors and a continuing
education program for Directors.
DISCLOSURE
11. With the Disclosure Committee and other members of Management, as needed, ensure appropriate
and timely disclosure of material information.
STRATEGIC PLANNING
12. Develop, with input from the Board, a Strategic Plan for the Corporation to maximize shareholder value,
recommend it to the Board for review and, in the Board’s discretion, approval.
13. Ensure the implementation of the Strategic Plan and report to the Board in a timely manner on
significant deviations from the Strategic Plan or within any parameters established by the Board.
BUSINESS MANAGEMENT
14. Provide general supervision of the operating subsidiaries and controlled entities of the Corporation
within the supervision and guidelines of the Board and consistent with decisions requiring prior approval
of the Board.
15. Analyze operating results of the Corporation and its operating subsidiaries and controlled entities
relative to established objectives and ensure that appropriate steps are taken to correct unsatisfactory
conditions.
16. Ensure the adequacy and soundness of the Corporation’s overall financial structure, review projections
of working capital requirements and supervise the obtaining of any outside financing that may be
indicated.
17. Oversee the preparation of annual operating budget, including capital requirements of each subsidiary,
for review and approval by the Board.
18. Approve capital expenditures and other commitments within the limits of delegated approval authorities.
19. Take necessary actions to protect and enhance the Corporation’s investments in its operating
subsidiaries and controlled entities.
RISK MANAGEMENT
20. Ensure, in concert with the Chief Financial Officer, that the Corporation has complied with all regulatory
requirements regarding financial reporting and internal controls over financial reporting.
21. Provide, in concert with the Chief Financial Officer, required regulatory certifications of financial
statements regarding the Corporation and its activities.
22. Oversee effective control and management of risks encountered by the Corporation.
ORGANIZATIONAL EFFECTIVENESS/SUCCESSION
23. Develop a strong organization with the right people in the right positions.
24. With the Human Resources Committee and the Board, ensure that the Corporation has an effective
senior Management team, that the Board has regular exposure to senior Management team members
and that, as and when appropriate, there exists an effective plan of succession and development for the
CEO and senior Management.
25. Review and approve the appointment, employment, transfer or termination of all key senior executive
officers of the Corporation and of the Chief Executive Officers of its operating subsidiaries and
controlled entities.
26. Monitor performance of senior executive officers of the Corporation and of the Chief Executive Officers
of the operating subsidiaries and controlled entities, and provide feedback and facilitate training and
development as appropriate.
COGECO INC.
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27. Cause to be established and maintained an effective system of communications throughout the
Corporation and with the operating subsidiaries and controlled entities.
28. Resolve any conflicts arising between the Corporation’s headquarters, operating subsidiaries and
controlled entities.
CEO PERFORMANCE
29. With the Board Chair and the Board, participate in developing CEO’s annual goals and objectives for
which the CEO is responsible.
OTHER
30. Carry out any other appropriate duties and responsibilities assigned by the Board.
SUCCESSION PLANNING
The Corporation recognizes the importance of leadership roles in the achievement of strategic goals. Talent
management sessions and succession planning exercises are conducted for management positions on a yearly
basis. Personal and professional development is reviewed during the performance management cycle and integrated
in individual development plans. Employee career interests are discussed. The identification of emergent leaders and
experts in specific areas of the business is also integrated to talent discussion.
RISK MANAGEMENT
The Corporation faces various general and specific risks that could significantly affect its financial condition, operating
results or business. These are highlighted in the Management’s Discussion and Analysis section of the 2014 Annual
Report. The Corporation has an on-going risk management policy and a process which includes risk identification and
risk assessment, risk control and mitigation and monitoring and reporting. The policy is overseen by the
Vice President, Internal Audit and Risk Management and any changes to the policy are approved by the Board. More
specifically, the Board’s responsibilities, in conjunction with Management, include:

As part of the annual strategic planning exercise, ensuring that all material risks have been taken into account in
developing long-term strategies and plans;

Identify, in conjunction with Management, the principal business risks facing the Corporation, including its
subsidiaries and controlled entities, in the context of its global business and affairs; and

Determine the Corporation’s tolerance for risk and approve the Risk Management Policy and any material
change thereto.
The Audit Committee reviews the principal business risks and oversees the implementation by Management of
appropriate measures to manage these risks. The Committee develops reasonable assurance that the principal
business risks are being effectively mitigated and controlled by:

Reviewing with Management on an ongoing basis such risks as well as the actions undertaken to manage these
risks;

Discussing with Management its assessment of the residual exposure to the Corporation, if any, ensuing from
the management of such risks; and

Enquiring of Management whether existing policies, processes and programs are appropriate to identify, manage
and control such risks.
Other actions of the Audit Committee include, for example, reviewing quarterly updates of the Corporation’s
outstanding contingencies including legal claims, tax assessments and other contingencies. The Audit Committee
also reviews, at least once a year, the appropriateness of insurance coverage maintained by the Corporation and its
subsidiaries and controlled entities.
COGECO INC.
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Senior Management facilitates the execution of the risk management vision and oversees the functioning of the risk
management program. Their duties are to:

Recommend to the Board the approval of the risk management policy;

Ensure risk management is integrated in determining business strategies and goals, monitoring performance
indicators, and making decisions involving key elements;

Ensure that communication involving risk management moves from senior levels downward;

Ensure that the risk management policy is followed by the organization and that the organizational roles and
duties are clearly defined;

Ensure that risk management activities are appropriate and that the necessary action plans are developed and
carried out;

Ensure appropriate disclosure of risk management in the MD&A and other public documents;

Review with the Board annually, as part of the annual strategic planning exercise, the opportunities and risks of
its global business and affairs;

Identify risks owners and oversight responsibilities; and

Fully support the risk management culture and activities.
CODE OF ETHICS
COGECO adopted in 2003 a Code of Ethics (the “Code”) which sets out the principles which should guide the
behaviour of all persons who are part of the COGECO Group or who contribute to its operations, image and
reputation. The Code deals with such matters as respect for individuals, customers, society, the environment,
business standards, corporate policies and the law. It addresses the issues prescribed by the Corporate Governance
Guidelines such as conflicts of interest, protection and proper use of corporate assets and opportunities,
confidentiality of corporate information, compliance with laws and regulations, reporting of illegal or unethical
behaviour and fair dealing with the Corporation’s security holders, customers, suppliers and employees. The Code
applies to all Directors, officers, employees, representatives and agents of the Corporation and its subsidiaries as
well as to consultants and subcontractors of the Corporation and its subsidiaries, particularly in their contractual
relationship with the Corporation or its subsidiaries.
The Code is refined and updated from time to time by the Board, upon the recommendation of the Corporate
Governance Committee. The employees of the companies and businesses of the COGECO Group as well as
consultants, sub-contractors and other representatives of the COGECO Group have access to a confidential and
anonymous Ethics Line under which individuals can access toll-free telephone lines (specific to location involved) or a
web site to report any potential violation of the Code or concerns about accounting or auditing matters. The Ethics
Line is operated by an external specialty provider that is independent of the COGECO Group. Sections in the Code
and in the Ethics Line User’s Guide explain how to report a violation of the Code and how it will be investigated.
The roles and responsibilities of the various stakeholders in the application of the Code have also been clarified and
the internal reporting procedures have been further detailed. Significant reports relating to accounting or auditing
matters are raised promptly with the Chair of the Audit Committee by the Vice President, Internal Audit and Risk
Management. The Vice President, Internal Audit and Risk Management otherwise informs the Audit Committee on a
quarterly basis on the number and scope of any reports that may be received relating to these matters. The Chair of
the Audit Committee then informs the Board of any significant report received.
Significant reports on matters other than accounting or auditing matters are to be raised promptly with the Chair of the
Corporate Governance Committee by the Vice President, Internal Audit and Risk Management. The Vice President,
Internal Audit and Risk Management otherwise provides an annual summary of reported violations or concerns and
their resolution to the Corporate Governance Committee who then report annually to the Board on the application of
the Code.
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All employees of the COGECO group were required in 2013 to attend a mandatory on-line training session to review
the terms set out by the Code of Ethics and the steps for reporting Code violations. Employees of the recently
acquired subsidiaries were subject to this mandatory training in 2014. Every new employee is systematically required
to perform this on-line training session upon hiring.
The Board directly, or by delegation to the Corporate Governance Committee, can grant waivers of compliance for
the benefit of Directors or executive officers in appropriate circumstances. No such waiver has been granted since
the adoption of the Code and, consequently, the Corporation filed no material change report during the last fiscal year
pertaining to any conduct of a Director or executive officer that constitutes a departure from the Code.
A Director or officer of the Corporation must disclose to it in writing, or by requesting to have it entered in the minutes
of meetings of Directors or of Board Committees, the nature and extent of any interest he or she has in an actual or
proposed material contract or material transaction. The obligation applies whether or not the contract or transaction
would ordinarily require the approval of the Board or shareholders of the Corporation and disclosure must be made,
in effect, under the provisions of the BCAQ as soon as he or she becomes aware of the contract or transaction.
The Code is available on the Corporation’s web site at www.cogeco.ca/cgogovernance and on the SEDAR web site
at www.sedar.com. It may also be obtained upon request to the Secretary of the Corporation at its head office:
5 Place Ville-Marie, Suite 1700, Montréal, Québec, H3B 0B3, telephone 514-764-4700. The Corporation may require
the payment of a reasonable charge if the request is made by a person or a corporation who is not a shareholder of
the Corporation.
The foregoing descriptions of the Board, Committees, Directors, disclosure policy and other matters reflect the
Corporation’s compliance with the Corporate Governance Guidelines in these areas.
DIRECTORS’ COMPENSATION
COMPENSATION POLICY
Director compensation is set by the Board on the recommendation of the Human Resources Committee
(the “Committee”).
The Committee reviews from time to time the Directors’ compensation to assess its competitiveness with the market
and completed a review in 2013 with the assistance of Towers Watson, with the result that effective as and from
January, 2014 the annual compensation of the Chairman of the Board was increased from $112,500 to $137,500 and
that of members of the Board from $40,000 to $75,000.
For benchmarking purposes, the Committee uses the comparator group used for benchmarking the executive
compensation of Canadian senior executives. The compensation program for the Directors is designed to achieve the
following goals:

Provide a competitive package necessary to attract and retain qualified and experienced members;

Recognize and reward the workload, time commitment and responsibility of Board and Committee members; and

Enable Board members to meet minimum share/DSU ownership expectations.
The following table sets out the annual retainer and meeting attendance fees payable to Directors of COGECO in
effect for fiscal 2014 under the Policy regarding the compensation of Board members of the COGECO Group:
Annual Cash Retainer
Chairman of the Board
Member of the Board
Chair of the Audit Committee(3)
Member of the Audit Committee
Chair of the Human Resources Committee(3)
Member of the Human Resources Committee
Chair of the Governance Committee(3)
$
137,500(1)
75,000(2)
15,000
5,000
10,000
4,000
7,000
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Annual Cash Retainer
Member of the Governance Committee
Chair of the Strategic Opportunities Committee(3)
Member of the Strategic Opportunities Committee
Per-Meeting Fees(4)
Board Meeting
Meeting of the Audit Committee
Meeting of Other Committees
$
3,000
10,000
3,000
1,500
1,500
1,500
(1)
Increased retainer effective from January, 2014. The Board Chair receives no per-meeting fees or retainer for acting as
Committee Chair or member of a Committee.
(2)
Increased retainer effective from January, 2014. A Director who serves on the Boards of both COGECO and Cogeco Cable
receives a lesser annual retainer from each entity in the amount of $47,500.
(3)
The retainer of a Committee Chair of the Corporation who also chairs the same Committee of Cogeco Cable is borne equally
between the two corporations.
(4)
The attendance fee for a joint meeting of the Boards or Committees of COGECO and Cogeco Cable is borne equally between
the two corporations.
The Corporation pays travel expenses incurred by the Directors to attend meetings of the Board of Directors or
Committees.
The Corporation does not award stock options to Directors as part of their remuneration.
TOTAL DIRECTOR COMPENSATION FOR THE LAST FISCAL YEAR
Out of the eight current Directors, seven Directors, who are neither officers nor employees of the Corporation,
received in the aggregate $648,375 for their services in their capacity as Directors during the year ending
August 31, 2014. Three of these Directors, Messrs. Garcia, McAusland and Peeters, who also served as Directors of
Cogeco Cable, received, under the same compensation policies, in the aggregate $257,875 for their services in their
capacity as Directors of Cogeco Cable during the year ending August 31, 2014, as described in the information
circular of Cogeco Cable for its annual meeting to be held on January 14, 2015.
DIRECTOR COMPENSATION TABLE
The following table summarizes all compensation paid to current individual Directors for the fiscal year ended
August 31, 2014:
Fees
(3)
Name
Louis Audet(1)
Board
$
Retainer
Committee
Member
$
Attendance
Board
Committee
Meetings
Meetings
$
$
Committee
Chair
$
Total Paid
$
Total
Retainer
and Fees
Paid in
DSUs
%
Travel
$
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Elisabetta Bigsby
66,250
6,000
7,500
9,000
13,500
N/A
102,250
78
Pierre L. Comtois
66,250
3,000
15,000
9,000
10,500
N/A
105,250
80
Paule Doré
66,250
4,000
7,000
9,000
10,500
N/A
96,750
0
COGECO INC.
39
Fees
(3)
$
Total Paid
$
Total
Retainer
and Fees
Paid in
DSUs
%
10,500
N/A
69,125
61
9,000
—
N/A
78,250
88
7,500
1,500
N/A
65,500
86
N/A
N/A
N/A
131,250
50
Board
$
Retainer
Committee
Member
$
Committee
Chair
$
Claude A. Garcia
41,875
8,000
1,250
7,500
Normand Legault
66,250
3,000
N/A
David McAusland
41,875
1,500
13,125
131,250
N/A
N/A
Name
Jan Peeters
(2)
Attendance
Board
Committee
Meetings
Meetings
$
$
Travel
(1)
Mr. Audet is President and Chief Executive Officer of the Corporation and does not receive any Director fees.
(2)
The Board Chair receives no per meeting fees or retainer for acting as a Committee Chair or member of a Committee.
(3)
The annual retainer increased on January 14, 2014, as described earlier under “Compensation Policy”.
DEFERRED SHARE UNIT PLAN
In April 2007, the Corporation established a deferred share unit plan (“DSU Plan”) to assist in the attraction and
retention of qualified individuals to serve on the Board of the Corporation. Each existing or new member of the Board
may elect in writing, in advance of the year to which his or her annual retainer(s) relates, to be paid a percentage of
his or her annual retainer(s) in the form of DSUs with the balance, if any, being paid in cash. The number of DSUs
that a member is entitled to receive in respect of any year is based on the elected percentage multiplied by his or her
annual retainer and divided by the applicable Share Price. For such purpose, the applicable Share Price is the closing
price of a subordinate share of the Corporation on the Toronto Stock Exchange (“TSX”) averaged over the twenty
consecutive trading days immediately preceding by one day the date preceding the date of grant. Dividend
equivalents are awarded in respect of DSUs in a member’s account on the same basis as if the member was a
shareholder of record of subordinate shares on the relevant record date, and the dividend equivalents are credited to
the individual’s account as additional DSUs (or fractions thereof).
Upon an individual ceasing to be a member of the Board, he or she may within seven days following such cessation
elect to receive, net of any applicable withholding taxes, by providing a notice of redemption: (i) a cash payment
equal to the number of DSUs credited to his or her account as of the termination date multiplied by the Share Price
on the termination date; or (ii) subordinate shares purchased on the individual’s behalf on the open market by a
broker; or (iii) a combination thereof. In the absence of the giving of a notice of redemption, the Director will be
deemed to have elected a cash payment. In the event of death of a Director, no notice of redemption shall be
required and the Corporation shall within 90 days of death make a lump sum cash payment for the benefit of the
trustee, administrator or other legal representative of the individual. The plan is administered by the Human
Resources Committee.
DIRECTOR SHARE AND DEFERRED SHARE UNIT OWNERSHIP
All current Directors own subordinate shares of the Corporation or DSUs.
In order to meet best corporate governance practices, Directors are expected, since October 13, 2006, to accumulate
subordinate shares of the Corporation or hold DSUs with a value equivalent to at least three times the basic annual
retainer payable to Directors (currently $47,500 from each Corporation for Directors who sit on the Boards of
COGECO and Cogeco Cable; $75,000 for Directors who sit only on the Board of COGECO; and $137,500 for the
Chairman of the Board). The Chairman, whose overall retainer includes recognition of his directorial role, is subject to
the same expectation. Directors have five years from their respective first election date to meet these minimum
shareholding expectations.
COGECO INC.
40
The following table sets out each Director’s shares and DSUs interest in the Corporation as at November 14, 2014,
as well as Director’s shares and DSUs at risk amount as at November 14, 2014:
Director
Louis Audet
Elisabetta Bigsby
Pierre L. Comtois
Paule Doré
Claude A. Garcia
Normand Legault
David McAusland
Jan Peeters
Total
Subordinate Shares
92,668(2)
0
10,000
6,500
3,000
0
4,170
6,555
122,893
DSUs
37,401(2)
4,304
12,414
0
4,296
3,851
6,889
8,359
77,514
Director’s “Equity at Risk”
amount as at
November 14, 2014(1)
7,385,318/11,771,046(3)
244,381
1,272,667
369,070
414,267
218,660
627,930
846,817
11,379,110
(1)
The Director’s “Equity at Risk” is based on the closing price of the subordinate shares of the Corporation on the TSX as at
November 14, 2014 which was $56.78 per share. A DSU is assumed to have the same value as a subordinate share. For
details, see the heading “Incentive Plan Awards”.
(2)
For the purposes of this table, the number of subordinate shares owned by Mr. Audet also includes the 3,200 multiple shares
he owns. Mr. Audet receives no Director fees and consequently owns no DSUs. The number appearing under the column
DSUs for Mr. Audet represents the number of ISUs and PSUs (value of PSUs determined assuming full vesting at target. For
additional information, please refer to section “Performance Share Units” on page 59) owned by him.
(3)
Further holdings in Cogeco Cable of 4,385,728 bring total combined Equity at Risk to $11,771,046. For more details, please
refer to the heading “Share Ownership” on page 63.
Consistent with the increase in the basic annual retainer adopted by the Board of the Corporation in January 2014,
the minimum shareholding expectations of 3 times the annual basic retainer are in relation to the Corporation:

$142,500 for Directors who sit on the Boards of COGECO and Cogeco Cable

$225,000 for Directors who sit only on the Board of COGECO

$412,500 for the Chairman of the Board
(the “2014 Increased Minimum Shareholding Expectations”)
As of November 14, 2014, seven current Directors meet these 2014 Increased Minimum Shareholding Expectations.
One current Director on the Board of Directors of the Corporation who previously met the minimum ownership
requirements but does not meet the new 2014 Increased Minimum Shareholding Expectations is in course of
completing the requirements and has up to three years from the date of the Annual Meeting of the Shareholders on
January 14, 2014 to achieve such holding, as provided in the Individual Director Mandate of the Corporation.
Any Director elected on the Board of Directors of the Corporation after January 14, 2014 shall have up to five years
from the date of his or her election to achieve these Minimum Shareholding Expectations.
COGECO INC.
41
EXECUTIVE OFFICERS COMPENSATION
LETTER TO THE SHAREHOLDERS
Dear shareholder,
The Corporation believes that good corporate governance is based on communication and transparency on all
matters related to the business of the organization, including executive compensation.
In that context, we take this opportunity to share with our shareholders our approach to executive compensation and
how we determine compensation offered to our executives commensurate with the performance achieved and the
return provided to our shareholders.
Our philosophy is to pay fair, reasonable and competitive compensation with a particular emphasis on stock and
performance-based compensation in order to best align the interests of our senior officers with those of our
shareholders.
This year, the Corporation will submit for the second time an advisory vote to its shareholders. It will give the
shareholders another opportunity to express their views on the Corporation’s approach to executive compensation
and provide important input to our Board of Directors. Last year, our shareholders cast an advisory vote that showed
that 99.81% were in favor of our executive compensation policy and programs. Although the Board of Directors was
satisfied with the results of the advisory vote, it will continue to monitor trends and best practices on executive
compensation in order to continuously reinforce the relationship between pay and performance.
The Foundation of our Executive Compensation Policy
The Corporation’s executive compensation policy rests on three basic principles:

Provide a total compensation that is competitive to attract and retain those key leaders who possess and master
the skillset required to develop and execute winning strategies in a highly competitive business environment;

Reinforce the link between pay and performance both at the corporate and individual levels; and

Provide a significant portion of total compensation that is variable and at risk with a particular focus on sustained
long-term performance.
Each executive is offered a total compensation that includes a fixed portion comprising base salary, pension, group
benefits, and perquisites and a variable portion comprising an annual bonus plan, and awards under an incentive
share unit plan and a stock option plan as well as a performance share unit plan introduced for the fiscal year 2015.
In addition, the Corporation imposes a minimum share ownership requirement to encourage entrepreneurial behavior
for the benefit of the shareholders.
Pay-for-Performance Linkage
When determining compensation, the Committee considers a number of financial and non-financial performance
indicators selected to support the Corporation’s strategy of producing long-term profitable growth which translates
into creation of value for our shareholders.
In 2014, the Human Resources Committee has undertaken a review of the Corporation’s incentive programs in order
to identify opportunities for improving the link between pay and performance. The review revealed that there was an
opportunity for improvement in the design of the long-term incentive program.
The review revealed that, although individual performance may serve in determining the size of grants, the payout
under the current long-term incentive program is strictly based on the Corporation’s share price performance. There
was an opportunity to add an incentive to encourage the executives to meet and exceed performance milestones
considered critical for generating value for our shareholders in the long-term. As a result of the review, the Committee
approved, effective for fiscal 2015, the introduction of a Performance Share Unit plan (“PSU Plan”) to complement the
Stock Option plan (“Option Plan”) and the Incentive Share Unit plan (“ISU Plan”). Under the PSU Plan, the eligible
participants will be granted PSUs. The PSUs will vest over a three-year period, based on the level of increase in the
COGECO INC.
42
Enterprise Value of the Corporation (as hereinafter defined on page 58 under the section “Annual Bonus Plan”) for
such three-year period, meaning that no vesting will occur unless the increase in Enterprise Value exceeds the
threshold set under the PSU Plan. Senior officers will receive a long-term incentive grant in the form of stock options,
ISUs and PSUs representing respectively 25%, 25% and 50% of the total long-term incentive value. The first grant of
PSUs was made in October 2014 with respect to the three-year performance period starting with fiscal year 2015.
The characteristics of the PSUs are described in more detail in the Deferred Compensation Plan table shown later in
this Information Circular.
Given the performance achieved by the Corporation during fiscal year 2014, the Committee approved the following
compensation decisions for its senior officers:

Payment of a short-term bonus of 133% of target on a consolidated basis; and

Grant of ISUs and stock options, the aggregate value of which was set in the middle of the grant guidelines
approved by the Committee as part of the executive compensation policy. However, individual grants were lower
or higher than the guidelines for some participants according to the assessment of their individual performance
and contribution.
The Board of Directors of COGECO approved the following decisions regarding Mr. Audet’s compensation for 2014:

An increase of 3.3% in base salary reflecting a market adjustment combined with a merit increase;

No increase in the annual target bonus;

An actual bonus of $1,263,500 or 133% of his target bonus reflecting 2014 COGECO’s corporate performance
achievement (see more information under the section “Annual Bonus Plan”); and

Long-term incentive grants in line with the grant guidelines approved by the Committee.
The following table summarizes Mr. Audet’s total compensation paid by COGECO for 2014 in comparison with 2013:
Base salary
Annual bonus earned
Long-term incentive grants(1)
Pension value
Total compensation
2014
2013
$950,000
$1,263,500
(133% of target bonus)
$1,357,655
$920,000
$1,536,400
(167% of target bonus)
$843,124
NIL
$3,571,155
$431,000
$3,730,524
Observations
Market and merit increase
Achievement of Enterprise Value
Creation was lower in 2014
Change due to market share price
movement and size of the grant(2)
(1)
Amounts shown in 2014 and 2013 represent a combination of ISUs of COGECO and Cogeco Cable as well as stock options of
Cogeco Cable – see detailed information on those grants in the Summary Compensation Table.
(2)
The number of options and ISUs granted in Fiscal 2014 was established based on a 12-month average share price which was
lower than the price on the date of grant resulting in a higher long-term incentive grant value.
Compensation Governance
The Committee follows strict corporate governance rules and principles in reviewing and determining the executive
compensation policy and programs.
For several years, the Committee has used the services of an independent consultant, Towers Watson, to provide
consulting services on executive compensation matters.
With the assistance of Towers Watson, the Committee has reviewed the comparator groups and the underlying
selection criteria, the compensation policy and the competitiveness of each compensation component within a total
compensation approach.
COGECO INC.
43
The Committee reviewed the findings of the analysis performed by Towers Watson and approved a number of
changes to the compensation of certain executives reflecting best competitive compensation practices.
The Committee recognizes that the business and competitive environment in which the Corporation operates requires
a balanced level of risk-taking to promote and achieve the performance expectations required to provide its
shareholders with a fair and superior return. At the same time, the Committee is aware that the compensation policy
and programs should not encourage senior executives to take excessive risk. Therefore, the Committee reviews from
time to time the compensation policy and programs to test for compensation incentive features that could encourage
executives to take profitable short-term decisions that could be detrimental to the long-term shareholders wealth.
The Committee is satisfied that the current executive compensation policy combined with the enterprise risk
management of the organization offer a balanced combination that promotes appropriate risk-taking with adequate
and reasonable compensation incentives. The policy features:

Appropriate balance between short and longer term incentives with more weight on long-term incentive at the
senior executive level; the following table shows the proportion of short and long-term incentives for each Named
Executive Officer (“NEO”):
Louis Audet
Edward T. Holleran
Louise St-Pierre
Pierre Gagné
Philippe Jetté
STI: Annual Bonus at target
LTI: Long-Term Incentives awards per guidelines (ISUs and Stock Options)

Maximums applied to annual bonus payout (maximum two times target);

Performance measures under the annual bonus plan are primarily focused on sustained profitability growth
taking into account the Corporation’s capacity for generating Enterprise Value creation in a mature market;

Grant of stock options, ISUs and PSUs (starting in fiscal 2015) representing respectively 25%, 25% and 50% of
the total long-term incentive value combined with minimum share ownership requirements which constitute a
good combination to promote the creation of sustained value for the shareholders without excessive risk taking;

Grant of PSUs (starting in fiscal 2015) with vesting based on performance hurdles beyond share price
appreciation;

A clawback policy for certain of the NEOs;

A cap on pensionable earnings for the CEO under the non-registered plan; and reasonable severance of 24
months in case of termination of employment of the CEO and other senior executives following a change in
control of the Corporation.
COGECO INC.
44
Conclusion
The Committee believes that the Corporation’s executive compensation policy and programs provide the Corporation
with the necessary tools to attract, retain and reward talented and experienced executives for creating sustainable
value for all shareholders over the long term.
Shareholders will have a non-binding advisory vote on our approach to executive compensation at the Meeting. The
resolution to be voted on can be found in the notice of the Meeting and is further described under the heading
“Shareholders Advisory Vote on the Board’s Approach to Executive Compensation”.
Elisabetta Bigsby
Chair of the Human Resources Committee
COGECO INC.
45
COMPENSATION DISCUSSION AND ANALYSIS
This compensation discussion and analysis (“CD&A”) is developed based on the disclosure rules approved by the
Canadian Securities Administrators. The information contained in the CD&A is given as at August 31, 2014, unless
otherwise stated.
ROLE AND ACCOUNTABILITIES OF THE HUMAN RESOURCES COMMITTEE (THE “COMMITTEE”)
Highlights

The Committee assumes overall accountability for the compensation policy and programs for the Corporation’s
senior executive officers.

The Committee receives expert, independent advice from Towers Watson.

The Committee is responsible to assess and review as necessary, the executive compensation programs
based on the practices that best fit the Corporation’s business culture and strategies.
Members of the Committee are Ms. Bigsby, Ms. Doré and Mr. Garcia.
Ms. Bigsby chairs the Committee. She held a number of senior business and strategy roles with the RBC Financial
Group. She was notably a member of the Executive Committee and the Chief Human Resources Officer from 2001 to
2007. She is a director of la Caisse de dépôt et placement du Québec and serves as the Chair of its Human
Resources Committee and is also a member of its Investment and Risk Committee.
Between 1990 and 2009, Ms. Doré held a number of senior business and strategy positions with CGI. As a member
of the executive team of the Corporation, she held, among other roles, that of Chief Human Resources officer. She
sits on the Governance Committee of CGI and serves as Chair of the Human Resources and Corporate Governance
Committee of Héroux Devtek.
Mr. Garcia has been President, Canadian Operations for over ten years of the Standard Life Assurance Company.
Prior to that, he was Senior Vice-President and Actuary and Executive Vice-President and Chief Operating Officer of
the Standard Life Assurance Company. Mr. Garcia holds several directorships in a number of companies in different
business sectors, including chairing the Compensation Committee of another company. Given his vast management
experience combined with his actuarial expertise, Mr. Garcia possesses the skill sets necessary to help the
Committees in dealing with complex and technical executive compensation issues.
These individual and collective qualifications provide the skills and experience necessary for the Committee to assess
and determine the Corporation’s compensation policy with due regard to its risk profile.
The Committee plays a critical role in the oversight and governance of the executive compensation policy and
programs of the Corporation. On matters that are specific to executive compensation, the Committee assumes the
following responsibilities:

Establish the Corporation’s approach to executive compensation philosophy, in consultation with Management
and external independent consultants;

Review and make recommendations to the Board on the general compensation structures of the Corporation,
including its subsidiaries and controlled entities;

Review and make recommendations to the Board on the components of overall compensation of senior
executive officers of the Corporation and its subsidiaries and controlled entities consisting of base salary, shortterm incentive plan (annual bonus determined on the basis of performance criteria) and the long-term incentive
program (stock option, performance share unit and incentive share unit plans), including special conditions
applying to senior executive officers such as the senior management special remuneration plan in the event of a
change in control of the Corporation;
COGECO INC.
46

Review the corporate goals and objectives for which the President and Chief Executive Officer is responsible and
that are relevant to his compensation and to review and make recommendations to the Board on the suggested
level of and/or changes in his overall compensation taking into consideration performance in light of those
corporate goals and objectives and competitive compensation practices;

Review and make recommendations to the Board on the suggested level of and/or changes in the overall
compensation of other senior executive officers of the Corporation and of the Chief Executive Officers of the
subsidiaries and controlled entities, taking into consideration individual performance and competitive
compensation practices;

Make recommendations to the Board on any new incentive plan or on any material change to the Corporation’s
short-term and long-term incentive plans and to discharge any responsibilities imposed on the Committee by
these plans;

Review annually the extent to which designated senior executives are meeting the minimum shareholding
expectations through shares or incentive or deferred share units;

Review periodically trends and developments in the pension area in North America and other jurisdictions where
the Corporation has operations and make recommendations to the Board on all pension retirement plans of the
Corporation, including its subsidiaries and controlled entities, and on any material amendments to these plans;

Monitor and review, as appropriate, the administration, funding and investment of the retirement plans of the
Corporation, including its subsidiaries and controlled entities.
INDEPENDENT CONSULTANT
Towers Watson has provided consulting services to the Corporation for several years, mainly on matters related to
executive and non-executive compensation. All consulting services provided by Towers Watson related to executive
compensation are retained and authorized by the Committee. More specifically, Towers Watson reports to the
Committee as outside compensation consultant to advise on compensation policies, including assessing
developments in the employment market for senior executives and Directors. Towers Watson may also provide to the
Corporation non-executive compensation related services. Towers Watson’s fees for the 2013 and 2014 fiscal years
regarding such services were as follows:
Fees paid to Towers Watson
Executive compensation related fees
All other fees with respect to various non-executive compensation related services
2014
$146 399
NIL
Fiscal Years
2013
$130 917
NIL
At the beginning of the fiscal year, the Committee reviews the list of non-executive compensation services that
Management plans to obtain from Towers Watson during the year, and pre-approves the budget for those services.
At the end of the year, Management reports to the Committee on the actual mandates performed by Towers Watson,
including the actual fees incurred.
COGECO INC.
47
EXECUTIVE COMPENSATION FRAMEWORK
Highlights

The executive compensation program rewards short and long-term performance.

The compensation philosophy encourages participation and behavior that align with the long-term interests of
the Corporation and its shareholders.

A significant portion of the total direct compensation is at-risk.

Annual bonus awards are based on corporate performance and the size of the long-term incentive awards is
based on individual performance and contribution.

The annual bonus and long-term incentive plans do not reward performance below expectations and the annual
bonus payout can be twice the target for exceptional results.

The Committee assumes overall accountability for the compensation policy and programs for the Corporation’s
senior executive officers.

The Committee receives expert, independent advice from Towers Watson.

The Committee is responsible to assess and review as necessary, the executive compensation programs based
on the practices that best fit the Corporation’s business culture and strategies.
The Corporation’s compensation policy and programs are designed to meet performance and competitiveness
objectives. They aim for an optimal balance between fixed and variable pay to ensure that highly qualified individuals
can be attracted, retained, and motivated for the benefit of our shareholders. They are also intended to encourage
participation and behavior that aligns with the longer term interests of the Corporation and its shareholders.
Our compensation programs reward long-term, sustainable performance:

Annual bonus plan targets a positive and sustainable Enterprise Value creation;

Annual awards can be reduced to zero for performance below minimum expectations;

Long-term incentive plan with a 5-year vesting period for the options, a 3-year time-vesting period for the ISUs
and a 3-year performance-vesting period for the PSUs (starting in fiscal 2015) promotes sustainable
shareholders’ value creation without exposing the Corporation to excessive risks; and

Executives are expected to own a minimum level of shareholding of the Corporation.
The current executive compensation policy and programs have been designed in light of a number of strategic and
competitive factors, including the following:

The Corporation is a major player in the Canadian telecommunications industry with annual revenues just over
two billion dollars and growing.

The Corporation pursues its goal of achieving significant growth while providing shareholders with
above-average return on investment.

The highly competitive market in which the Corporation operates with profitable growth objectives is best
supported by a pay-for-performance philosophy accompanied with a prudent approach to risk management.
COGECO INC.
48
The Corporation’s vision is to combine a competitive compensation package to foster career-long employment of top
talent with a leveraged variable compensation segment to encourage reasonable risk-taking and entrepreneurial
action for the benefit of shareholders. The Corporation believes that pay-for-performance can best be accomplished
through challenging but achievable individual and corporate performance objectives with ample opportunities to earn
significant reward when short and long-term performance exceeds expectations. Our executive compensation
program rewards according to performance and award opportunities range from 0 to two times target.
The following illustrates the executive compensation framework.
TOTAL DIRECT COMPENSATION
Compensation
Element
Base
Salary
INDIRECT COMPENSATION
Annual
Bonus
Long-term
Incentives
Group
Benefits
Retirement
Benefits
Mission
Pay for
individual
contribution
and
competencies
Pay for annual
corporate
performance
Pay for future
performance
with ultimate
goal of creating
value for the
shareholders
Investment in
executive
health and wellbeing
Investment in
financial
security of
long-service
executives after
retirement
Performance
Criteria
Individual
contribution
and
competencies
Corporate
performance
Corporate
performance
and Individual
contribution
Ultimate payout
of grant and
size of annual
grant of options
and/or ISUs
and/or PSUs
Individual contribution and
competencies
Performance
Outcome
Salary increase
and position
within the
salary structure
Cash payment
Performance
Period
1 year
1 year
Multiyear and
1 year
1 year
Impact
On Pay
Career-long
Annual(1)
Multiyear
Career-long
Some benefits increase in proportion
to salary
Variable pay-for-performance
(1)
The impact on pay can exceed one year as the annual bonus payments enter into the definition of “salary” for the purpose of
determining the annual pension payable for a designated senior executive who joined the Corporation before
September 1, 2002.
COGECO INC.
49
The following table presents the proportion of compensation at risk for each NEO.
Name
Positioning
Compensation
% at risk
Louis Audet
69%
Edward T. Holleran
60%
Louise St-Pierre
61%
Pierre Gagné
58%
Philippe Jetté
47%
 Base Salary
 Annual Bonus at Target
 Long-term Incentives awards per guideline
EXECUTIVE COMPENSATION POLICY
The Committee adopted a compensation policy that is specific to the senior executives of the Corporation and its
subsidiaries and controlled entities. The policy provides for a specific positioning of each element of total
compensation within a well-defined group of comparable companies.
COMPARATOR GROUPS
The Committee reviewed the selection criteria and the comparator groups to ensure they are representative of and
competitive with the executive recruitment market.
The Committee is of the opinion that the comparator groups are a good representation of the competitive market for
its executives as it captures organizations against which it competes for both business and talent.
COGECO INC.
50
The Corporation uses two different comparator groups:

The “primary comparator group” is used to benchmark executive compensation of the Corporation’s
Canadian-based senior executives.

The “U.S. comparator group” is used to benchmark executive compensation of U.S.-based senior executives of
Atlantic Broadband.
Primary Comparator Group
Based on the review of the primary comparator group, the Committee approved two changes to the group: Sirius XM
Canada Holdings Inc. was added to the group as it represents a good relevant player in the media industry. Bell
Media (formerly Astral Media) was removed given that it is now part of BCE which is already part of the group. The
following table presents the primary comparator group including the criteria that were used to make the selection:
Selection Criteria
Industry
Company
Aimia Inc.
BCE
Bell Aliant
Corus Entertainment
Gaz Métro
Gesca
Industrial Alliance
Laurentian Bank of
Canada
Lions Gate
Entertainment
MTS Allstream
Postmedia Network
Canada
Quebecor Media(1)
Rogers
Communications
Shaw
Communications
Sirius XM Canada
Holdings Inc.
TELUS
Torstar Corporation
Transcontinental
(1)
Telecommunications/
Media
Other
√
√
√
√
Listed
√
√
√
√
√
Regulated
Sector
√
√
√
√
Headquartered
in Québec
√
√
√
√
√
√
√
√
√
√
√
√
√
Controlling
Shareholder
√
Potential
Recruitment
Pool
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Includes Vidéotron Group and TVA Group.
COGECO INC.
51
U.S. Comparator Group
The Corporation reviews executive compensation of its U.S.-based executives against a group of companies that are
similar in nature to the Corporation and that attract a similar profile of employees, professionals and experts. Based
on the review of the comparator group, the Committee approved the following changes: Cox Communications and
Dispatch Broadcast Group were removed given that they are not listed companies and were replaced by Frontier
Communications and Verizon Communications, two companies which are listed.
Selection Criteria
Company
Cablevision Systems
Charter Communications
Cincinnati Bell
Comcast Corporation
Consolidated Communications
Crown Castle
Fairpoint Communications
Frontier Communications Corporation
General Communication
Globecomm Systems
Level 3 Communications
Media General
Time Warner Cable
Verizon Communications
Telecommunications/
Media
√
√
√
√
√
√
√
√
√
√
√
√
√
√
Listed
√
√
√
√
√
√
√
√
√
√
√
√
√
Potential
Recruitment Pool
√
√
√
√
√
√
√
√
√
√
√
√
√
√
The total compensation competitiveness is established in relation to the comparator groups and is aligned with the
th
median. Top individual performers’ total compensation could reach the 75 percentile through additional long-term
incentive compensation.
The compensation market comparison is done using the regression analysis which is a method to predict the
“size-adjusted” competitive level of compensation to reflect the size of the Corporation or its subsidiaries and
controlled entities in relation to that of the other companies of the comparator group. This method mitigates the
impact that much larger companies may have on the competitive compensation levels for the Corporation and its
subsidiaries and controlled entities. Also, when comparator companies have much larger corporate scope, the
benchmarking is done at the group/divisional level within these comparators.
COGECO INC.
52
MARKET POSITIONING
The following table summarizes the market positioning for each element of total compensation and in aggregate on a
total compensation basis:
Market Positioning
Direct
Compensation
Indirect
Compensation
(1)
Pay Element
For Performance Meeting Expectations
For Top Performer Achieving Superior
Performance
Base Salary
Market median
Above salary structure mid-point
Annual Bonus
Target set at market median
Maximum can reach twice target
Long-Term Incentives
Annual grant value set to bring total
compensation to market median
Annual grant value set to bring total
compensation up to the 75th percentile
of the market
Benefits
Competitive (approximately market
median)
Competitive (approximately market
median)
Pension
Competitive(1) (approximately market
median)
Higher salary and bonus payouts may
generate superior pension benefits
when superior performance is
maintained
Total Compensation
Median
Up to 75th percentile
Designated senior executives who joined the Corporation prior to September 1, 2002, participate in a retirement benefit
program where the employer-provided value is positioned above the market median. Consequently, for these designated
senior executives, the long-term incentive grant required to bring total compensation to the market median is below the median
grant. See “Post-Retirement Additional Allocation Program for Designated Senior Executives”.
ANNUAL REVIEW BY THE COMMITTEE
1
Step 1
2
Step 2
Evaluating Business and Individual Performance
Determining available awards to allocate
Step 3
3
Assessment may lead to salary changes within the
structures, the annual bonus awards for the year and the
determination of the size of the next long-term incentive
grant
The Committee has the responsibility of reviewing and making recommendations to the Board on the suggested level
of and/or changes in the compensation of senior executives of the Corporation and its subsidiaries and controlled
entities in regard to all elements of their compensation. During the fiscal year 2014, the Committee mandated Towers
Watson to conduct a total compensation review of the senior executive positions to assess the impact of changes in
compensation practices in the industry. The results of the review, combined with the Committee’s assessment of
individual and corporate performances, were used by the Committee to recommend changes to the compensation of
the senior executives for the fiscal year 2015.
Individual contribution is assessed by the Committee. At the end of the year, the CEO presents his assessment of
individual contribution of senior executive officers to the Committee, who then report at the next regular Board
meeting. The assessment may lead to salary changes within the structures, the annual bonus awards for the year
and the determination of the size of the next long-term incentive grant. In fiscal year 2014, the stock options and/or
ISUs granted by the Boards of COGECO and of Cogeco Cable have positioned the total compensation of senior
COGECO INC.
53
th
th
executives between the 50 and the 75 percentile of the comparator group in accordance with the Corporation’s
compensation policy.
PAY ELEMENTS
The following table provides a summary description of each element of the total compensation:
Component
Base
Salary
Annual
Bonus
Long-Term
Incentive
Pension
Benefits
Design Summary
 Actual base salary paid to an individual
executive is set within a salary structure with
a mid-point aligned with the median value of
the job within the comparator group (i.e.,
market)
 The actual paid salary is set in recognition of
the individual’s skills, experience and
contribution
 The annual bonus payout is tied to the
achievement of annual corporate
performance goals
 Bonus may vary and can be reduced to zero
for performance well below expectations
Form
 Cash
Potential Compensation
 Set with reference to the
median of the comparator
group
 Cash-based
performance pay
 Target is 100% of base
salary for the CEO and
ranges from 45% to 75%
for the other NEOs.
Maximum payout is limited
to twice the target
 ISUs
 Three-year less one day deferral period with
full vesting only at the end of the period (cliffvesting) to promote total share price
appreciation, retention and ownership
 Focus executives on the successful
execution of the Corporation’s strategic plan
that will translate into creation of value for the
shareholders
 PSUs (effective fiscal 2015)
 Three-year less one day deferral period with
cliff-vesting at the end of the period to
promote Enterprise Value creation
 Focus executives on the successful
execution of the Corporation’s strategic plan
that will translate into creation of value for the
shareholders
 Stock Options
 10-year term with 20% per year vesting
 Gain at time of exercise according to
increase in share price during the period
between the grant date and the exercise date
 No value unless the share price increases
 Retirement plans
 The Corporation provides its Canadian-based
senior executives with a basic contributory
defined benefit pension plan. In addition,
designated senior executives are provided
with an additional allocation program which is
intended to supplement the basic contributory
defined benefit plan
 The President and Chief Executive Officer of
Atlantic Broadband participates in a 401(k)
Plan in which matching contributions may be
made in accordance with the terms of the
plan
 Share units
settled in shares
 Target grant guidelines are
120% of the base salary
mid-point for the CEO and
range from 50% to 100% of
base salary mid-points or
actual salary for the other
named executive officers
 Performancebased share
units settled in
shares
Risk-mitigating
elements
 Provides for a
balanced mix of
pay components
(fixed vs. variable)
 Use of external
advisor and peer
analysis
 Plan targets
reviewed and
approved annually
based on review of
annual business
plan
 Payouts are
capped
 No guaranteed
minimum payout
 Significant
weighting towards
long-term incentive
compensation
 No minimum
guaranteed payout
 Limited leveraged
incentive
 ISUs and PSUs
promote
sustainability of
results
 Stock options
 Cash payments
following
retirement
COGECO INC.
 Non-registered plans
restricted to executives and
senior management
employees
 Retirement benefits for
executives and senior
management employees
are calculated on the basis
of salary(1)
 Cap on
pensionable
earnings for the
CEO
54
Component
Benefits
and
Perquisites
(1)
Design Summary
 Canadian-based executives participate in a
group insurance program to provide them
and their families with appropriate health and
well-being support. The executives are also
provided with a car allowance plus a
perquisite annual allowance consistent with
Canadian market practices
 The President and Chief Executive Officer of
Atlantic Broadband is eligible to an individual
life insurance coverage with an annual
premium of US$10,000. No other perquisites
are offered.
Form
 Non-cash
perquisites
Potential Compensation
 Limited to competitive
benefits
Risk-mitigating
elements
 Reasonable
package that is
performance
neutral
Retirement benefits for executives hired before September 1, 2002 are calculated on the basis of salary and annual bonus.
BASE SALARY
When reviewing base salary increases for each executive, the Committee takes into account the executive’s
responsibilities, experience and performance assessment, the positioning of the individual salary within the
Corporation’s salary structure and increases granted within the industry for similar positions.
After review, the Committee recommends to the Board for approval the base salary increases for each executive.
For the fiscal year 2014, increases in base salary of the NEOs ranged from 3.3% to 20.0% as indicated in the
following table:
Base Salary
2013
2014
Louis Audet
$920,000
$950,000
3.3%
Louise St-Pierre(1)
$500,000
$600,000
20.0%
Pierre Gagné
$502,000
$523,000
4.2%
Edward T. Holleran(2)
$633,180
$320,000
$671,950
$350,000
6.1%
9.4%
Philippe Jetté
Increase
(1)
Ms. St-Pierre was appointed President and CEO of Cogeco Cable Canada on August 6, 2013. Her 2014 base salary has been
increased to $600,000 to take into account her increased responsibilities.
(2)
The salary is expressed in Canadian dollars using an exchange rate of US$1.00 = C$1.053 for 2013 and of US$1.00 =
C$1.0873 for 2014.
COGECO INC.
55
INCENTIVE PROGRAMS THAT SUPPORT A STRONG PAY-FOR-PERFORMANCE PHILOSOPHY
Incentive ShareISUs
Units
Annual Bonus
Promotes enterprise value
creation and teamwork
Grant based on individual
performance and contribution
Time vesting – 3 years to
promote retention of key
leaders
PAY FOR
PERFORMANCE
Performance
PSUs
Share Units
Stock Options
Grant based on individual
performance and contribution
Vesting 5 years to reward longterm appreciation in shareholder
value
(Starting in fiscal 2015) Grant
(Starting inperformance
fiscal 2015)
based on individual
and contribution
Grant based Performance
on individual
Vestingand
– 3 years
based
performance
contribution
on cumulative
Performance Vesting
– 3 years
based onEnterprise
enterprise Value
value creation
creation
The Corporation sponsors four incentive programs for its executives with the addition of the PSU Plan in fiscal 2015.
Each program promotes and rewards strong performance with the ultimate goal of creating sustained value for the
Corporation’s shareholders. The following presents an overview of the four programs and illustrates how they
contribute in supporting a robust pay-for-performance philosophy.
ANNUAL BONUS

Based on the consolidated operating income before interest, taxes, depreciation and amortization required to
generate expected growth in Enterprise Value, a measure that promotes teamwork and has a direct link with
shareholder value

Bonus formula:
(1)

No bonus if no Enterprise Value is created

Target bonus can only be earned when significant Enterprise Value is created (12% for COGECO Inc. ,
11% for Cogeco Cable Canada and 15% for Atlantic Broadband)

To earn the maximum bonus at two times target, the Enterprise Value must also be twice the objective
(1)
(24% for COGECO Inc. , 22% for Cogeco Cable Canada and 30% for Atlantic Broadband)
(1)
Inclusive of the dividend return in fiscal year 2014.
INCENTIVE SHARE UNITS

Size of annual grant is determined according to each executive’s individual performance and contribution
(strategic thinking, innovation, engagement, etc.)

ISUs vest after 3 years to promote retention of key leaders in a very competitive market
Size of ISU grant based on
individual performance
x
Value of ISUs based on share price
performance only (no dividend
equivalent)
COGECO INC.
=
Reward best performers
who create value for the
shareholders
56
PERFORMANCE SHARE UNITS PLAN EFFECTIVE FISCAL 2015


PSUs vest after 3 years based on Enterprise Value creation

PSUs offer an optimal incentive leverage and a strong pay for performance alignment
Size of PSU
grant based on
individual
performance
x
Vesting
multiplier
based on
performance
=
Number of
vested PSUs
x
Value of PSUs
based on
share price
=
Reward best
performers who
create Enterprise
Value that translates
into value for the
shareholders
STOCK OPTION PLAN


Stock options vest gradually after 5 years to promote strong retention of key leaders in a very competitive
market

Options offer a stronger incentive leverage to reward long-term appreciation in shareholder value
Size of options based on
individual performance
x
Share price appreciation (no gain if
no share price appreciation)
=
Reward best performers
who create sustainable
value for the shareholders
ANNUAL BONUS PLAN
According to the Corporation’s compensation policy, members of the executive team are entitled to a target bonus for
meeting their objectives as follows:
Minimum
0%
0%
0%
0%
0%
Louis Audet
Edward T. Holleran
Louise St-Pierre
Pierre Gagné
Philippe Jetté
Bonus (as % of base salary)
Target
Maximum
100%
200%
75%
150%
70%
140%
65%
130%
45%
90%
The annual bonus payout is based on corporate performance for senior executive officers of the Corporation. The
corporate performance is determined on the basis of the achievement of the Corporation’s financial objective from an
Enterprise Value creation formula.
A sustained positive Enterprise Value creation reflects the capacity of our executives to formulate solid strategic plans
combined with effective execution.
COGECO INC.
57
How is Enterprise Value calculated?
First, this formula calculates, for a specific year, the Enterprise Value based on the consolidated operating income
before interest, taxes, depreciation and amortization of the Corporation. Second, the Enterprise Value previously
calculated is reduced by the consolidated indebtedness of the Corporation and the equity value of the holding of
shareholders other than COGECO in Cogeco Cable to arrive at the equity value at the beginning of the period.
Finally, the enterprise equity value achieved for a year is compared with that for the prior year, calculated on the
same basis, to determine the change in value. This achieved Enterprise Value creation is compared with the value
creation objective approved by the Board of Directors.
2014 Objectives and Awards
At the beginning of the year, the Board determines the objectives of Enterprise Value creation for the year. For fiscal
year 2014, the Board has approved the following grid:
Payout (as a % of target)(1)
Enterprise Value creation objective of
COGECO
Enterprise Value creation objective of Cogeco
Cable Canada
Enterprise Value creation objective of Atlantic
Broadband
At threshold
0%
0%
At target
100%
12.6 %(2)(3)
Exceptional
200%
24% or more
2014
Enterprise
Value creation
results
14.5%(2)
2014
Payouts
133%
0%
11%
22% or more
15.0%
136%
0%
15%
30% or more
15.3%
102%
(1)
For Enterprise Value creation between two performance levels (between threshold and target or between target and
exceptional), the amount of the bonus is calculated by linear interpolation between the respective bonus levels.
(2)
(3)
Increased to 12.6% from 12%, as stated last year.
for
Cogeco Cable
2015 Objectives
12%
For fiscal year 2015, the
Board of Directors of the
Corporation set the
following Enterprise Value
creation objectives:
10%
for
Cogeco Cable
Canada
15%
for
Atlantic Broadband
(inclusive of the
dividend return)
LONG-TERM INCENTIVES
The Committee makes recommendations to the Board on the stock options, ISUs and, starting in fiscal 2015, PSUs
to be granted to each member of the executive team based on his or her individual contribution, taking into account
the Corporation’s executive compensation policy as described in the “Market Positioning” section.
COGECO INC.
58
Long-term incentive awards were granted in fiscal 2014 in a proportion of 75% ISUs and 25% stock options. Starting
in fiscal 2015, the allocation of the long-term incentive awards will be 25% ISUs, 50% PSUs and 25% stock options.
Target grants range from 50% to 120% of the executive salary midpoint, or in the case of Mr. Holleran, of his salary.
Minimum
0%
0%
0%
0%
0%
Louis Audet
Edward T. Holleran
Louise St-Pierre
Pierre Gagné
Philippe Jetté
Target
120%
75%
100%
85%
50%
Maximum
240%
150%
200%
170%
100%
The Committee does not take into account the amount and terms of the executives’ outstanding stock options or ISUs
when determining the amount of stock options and ISUs granted for the year.
The Committee believes that stock options, with a 10-year term and a 5-year vesting, ISUs with a 3-year cliff vesting
and starting in fiscal 2015 PSUs with a vesting based on performance over a 3-year period are an appropriate
combination of long-term incentives for the Corporation for reasons that include the following:

Stock options, ISUs and PSUs with appropriate time-vesting conditions are an effective means of retaining key
executives;

With respect to stock options, the executives only benefit if shareholder value increases over the long term;

ISUs and PSUs replicate stock ownership and thus provide a direct alignment of the executives’ interests with
those of the shareholders; and

PSUs, that vest based on performance, encourage the executives in generating incremental Enterprise Value
over time that should translate into increased value for the shareholders.
INCENTIVE SHARE UNITS
The current ISU Plan was adopted in 2006. The objectives of the ISU Plan are to retain employees and to align their
interests with those of the shareholders. The Committee reviews annually the individual contribution of each
executive and recommends to the Board the number of units to be granted.
The Committee will use the following formula to determine the number of ISUs to be granted:
Number of
ISUs
Dollar value of the award
=
Average closing stock price of the Corporation for the previous
12-month period ending August 31
Once the number of units is determined, their value at the time of grant will be based on the closing price of a
subordinate share of the Corporation on the TSX on the trading day preceding the date of grant.
ISUs vest at the end of the 3-year period less 1 day (except in case of a trading blackout, in which case it shall be the
next day following the expiration of the blackout). The holder of ISUs is entitled to payment of his or her units at the
end of the above-mentioned term only, if he or she is still actively employed with the Corporation or Cogeco Cable.
PERFORMANCE SHARE UNITS
The new PSU Plan was approved by the Board of Directors in October 2014 and was effective with the first grant for
fiscal 2015. The objectives of the PSU Plan are to retain employees, to align their interests with those of the
shareholders, and to sustain positive corporate performance, as measured by the Enterprise Value creation. The
Committee will review annually the individual contribution of each executive and recommends to the Board the
number of units to be granted.
COGECO INC.
59
The Committee uses the following formula to determine the number of PSUs to be granted:
Number of
PSUs
=
Average closing stock price of the Corporation for the previous
12-month period ending August 31
PSUs will vest at the end of the 3-year period less 1 day (except in case of a trading blackout, in which case it shall
be the next day following the expiration of the blackout) according to a performance vesting schedule that is approved
by the Human Resources Committee at the beginning of the 3-year period. The performance vesting schedule
includes three levels of performance (Threshold, Target and Maximum) where each level of performance
corresponds to a PSU vesting factor as illustrated in the following table:
PSU Vesting Factor
Increase in Enterprise Value
Threshold
0x
0
Target
1.0x
3-year cumulative Enterprise Value increase
Maximum
1.5x
Target x 1.5
For performance falling between two levels of performance, the PSU factor will be calculated on a prorata basis.
STOCK OPTION PLAN
The current Option Plan of the Corporation was adopted in 1993 and has been refined and updated from time to time.
The Option Plan complements the ISU Plan and the PSU Plan by providing a more leveraged incentive vehicle that
promotes sustained appreciation of the market capitalization of the Corporation.
The options generally vest 20% per year over five years and have a 10-year term.
The Committee uses the following formula to determine the number of stock options to be granted:
Number of
Stock
Options
=
Average closing stock price of the Corporation for
the previous 12-month period ending August 31
x
Black-Scholes
Factor
Once the number of stock options is determined, their exercise price is determined by the Board of Directors on the
date of grant and must not be less than the closing price of a subordinate share of the Corporation on the TSX on the
trading day preceding the date of grant.
For the fiscal year ended August 31, 2014, no options on subordinate shares of the Corporation were granted to
NEOs.
BENEFITS
The Corporation offers all its designated Canadian-based employees, including its NEOs, a retirement arrangement
including a post-retirement additional allocation program. The main provisions of the arrangement are described in
more detail under the heading “Retirement Agreements” of this Information Circular. The benefits accrued under this
arrangement form an integral part of the total compensation offered by the Corporation. This arrangement aims to
provide an adequate level of income to the retired executive officers who have spent a significant portion of their
career with the Corporation.
Also, the Corporation offers medical, dental, life, accidental death and dismemberment and short and long-term
disability insurance coverage to the NEOs. There were no material changes in fiscal year 2014 to the retirement or
group insurance benefits.
COGECO INC.
60
For the President and Chief Executive Officer of Atlantic Broadband, the Corporation offers a 401(k) plan, under
which employees may elect to make tax deferred contributions up to a maximum established annually by the Internal
Revenue Service. The employer matches 50% of the employees' contributions up to a maximum of 5.0% of the
employees' compensation.
EXECUTIVES’ PERQUISITES
The Corporation currently provides to its Canadian-based NEOs a limited number of perquisites including car
allowance and a fixed cash allowance in lieu of other perquisites. There were no material changes in fiscal year 2014
to the executive perquisites programs; the value does not exceed the lesser of $50,000 or 10% of the annual base
salary for each NEO.
The President and Chief Executive Officer of Atlantic Broadband do not receive any form of perquisites.
SHARE AND/OR INCENTIVE SHARE UNIT OWNERSHIP
To further align the interests of senior management with those of shareholders, the Corporation expects executives
who participate in the long-term incentive program to accumulate and retain Corporation shares steadily over the
course of their career. The guidelines take the form of minimum expectations of ownership expressed as a multiple of
salary for the President and Chief Executive Officer and as a multiple of the target grants under the Corporation’s
long-term incentive program (“LTIP”) for the other designated senior executives (any such individual being referred to
hereinafter as a “designated senior executive”).
The President and Chief Executive Officer is expected to accumulate shares and/or ISUs and/or PSUs with a market
value of at least five times his annual base salary. Other designated senior executives of the Corporation are
expected to accumulate shares and/or ISUs and/or PSUs with a market value of at least 2.0 times the target grants
under the Corporation’s long-term incentive program. Executives who are officers of both COGECO and Cogeco
Cable can comply with ownership expectations using a combination of subordinate shares and/or ISUs and/or PSUs
from both entities.
There is no minimum period to comply with the ownership expectations given that the long-term incentive program is
designed to facilitate the meeting of the ownership expectations within a reasonable period of time. The period for an
executive who becomes subject to the ownership expectations for the first time is not expected to exceed three years.
The following table presents the shareholdings of each NEO as at August 31, 2014 in comparison with the minimum
ownership expectation:
Shareholdings as at August 31, 2014
Name
Louis Audet
Pierre Gagné(4)
Louise St-Pierre
Edward T.
Holleran
Philippe Jetté
—
Subordinate
Voting
Shares
Cogeco
Cable(2)
$
3,055,998
N/A
957,617
—
—
—
ISUs
Cogeco
Cable(2)
$
1,097,313
N/A
1,592,580
1,241,460
—
376
—
489,060
Subordinate and
Multiple Shares
COGECO(1)
$
4,982,978
N/A
ISUs
COGECO(1)
$
2,145,057
N/A
—
Total
$
11,281,346
N/A
2,550,197
1,241,460
Minimum
Ownership
Expectations
$
4,750,000(3)
N/A
1,060,000(5)
1,317,808(5)
489,436
295,000(5)
Status
Exceeded
N/A
Exceeded
In course of
completing
requirement
Exceeded
(1)
Based on the closing prices of the subordinate shares and multiple shares of COGECO on the TSX as at August 29, 2014
($57.20).
(2)
Based on the closing prices of the subordinate voting shares of Cogeco Cable on the TSX as at August 29, 2014 ($62.70).
(3)
For Louis Audet, the multiple is applicable on the annual base salary.
(4)
Given that Mr. Gagné left the Corporation before the end of the year, he is no longer subject to the minimum ownership
expectations.
(5)
Equals two times his/her annual target grant.
COGECO INC.
61
CLAWBACK OF PRIOR AWARDS
In 2013, the Corporation adopted a clawback policy whereby, should an incidence of gross negligence, intentional
misconduct or fraud by the Chief Executive Officer or the Chief Financial Officer of the Corporation ever arise with
respect to the financial reporting of the Corporation or its subsidiaries that contributes to a material restatement of its
financial statements in a way that results in lower incentive-based rewards in relation to any period from and after
September 1, 2013, the Board of Directors of the Corporation, upon the recommendation of the Human Resources
Committee, shall have the discretion to clawback all or a portion of the after-tax gains on any incentive-based awards
i.e. annual bonus + ISUs + PSUs (starting in fiscal 2015) + stock options of the applicable officers listed above related
to the period or periods in respect of which the lower awards would have applied.
CONSTRAINT ON HEDGING
The Corporation has adopted a policy to the effect that, unless otherwise determined by the Board or the Human
Resources Committee in special circumstances, neither a NEO nor a Director is permitted to purchase a forward
contract, including for greater certainty, prepaid variable forward contracts, equity swaps, collars or units of exchange
funds, that is designed to hedge or offset a decrease in value of equity securities of the Corporation granted as
compensation or held directly or indirectly by the NEO or Director.
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
Highlights

Mr. Audet’s base salary paid by COGECO increased by 3.3%.

Mr. Audet received a bonus paid by COGECO of approximately 133% of his base salary which represents a
multiple of 133% of his target bonus (100%).

Mr. Audet received stock options and ISUs as follows:
o
14,400 ISUs of COGECO at a price of $48.20;
o
44,300 stock options for the purchase of subordinate shares of Cogeco Cable at an exercise price of
$50.10; and
o
6,600 ISUs of Cogeco Cable at a price of $50.10.
The overall compensation of Mr. Audet is subject to annual review by the Human Resources Committee of COGECO.
The Committee makes recommendations to the Board of COGECO on the suggested level of and/or changes in his
overall compensation taking into account performance in light of the corporate goals and objectives for which he is
responsible and that are relevant to his compensation as well as competitive compensation practices. Any proposed
change to the compensation of the President and Chief Executive Officer is approved by the Board of COGECO,
without the participation of the President and Chief Executive Officer.
SALARY
The Board, upon the recommendation of the Committee, approved an increase of 3.3% in Mr. Audet’s base salary for
the fiscal year 2014. The increase was set by the Committee to reflect Mr. Audet’s achievement of objectives set by
the Board for fiscal year 2013 and market competitive salary for comparable positions in companies included in the
primary comparator group presented above. The objectives set by the Board for fiscal year 2014 were strategic in
nature and related to the following indicators:

Enterprise Value creation objective for the Corporation;

Competitive standing of the Corporation;

Growth opportunities;
COGECO INC.
62

Organizational Effectiveness and Succession;

Ethics;

Relationships with external stakeholders; and

Financial Strength.
ANNUAL BONUS
The Committee makes recommendations to the Board on the annual bonus payable to the President and Chief
Executive Officer taking into consideration COGECO’s financial performance achieved during the fiscal year. The
annual bonus payable to the President and Chief Executive Officer for fully meeting these objectives (referred to as
the “target bonus”) is 100% of his base salary and can reach a maximum of 200% of his base salary for exceptional
results. During the last fiscal year, Mr. Audet received from COGECO a bonus of $1,263,500 which represented
approximately 133% of his base salary. The 2014 bonus was awarded based on the achievement of the following
financial results of COGECO:
Financial Performance Measure
Enterprise Value creation objective
Target
12.6%(1)(2)
(1)
(2)
Increased to 12.6% from 12%, as stated last year.
2014 Results
(COGECO)
14.5%(1)
Performance
Level
Above target
Payout
133%
LONG-TERM INCENTIVES
The Human Resources Committees of COGECO and of Cogeco Cable make recommendations to the Board on the
stock options and ISUs to be granted to the President and Chief Executive Officer. The amount and frequency of
such grants are designed to link from year to year a relatively stable portion of the compensation of the President and
Chief Executive Officer to the return on the COGECO and Cogeco Cable’s shareholders’ investments. For the fiscal
year ended August 31, 2014, Mr. Audet was awarded 14,400 ISUs of the Corporation. He was also awarded by the
Board of Cogeco Cable 10 year stock options for the purchase of 44,300 subordinate shares of Cogeco Cable under
the subsidiary’s Option Plan and 6,600 ISUs of Cogeco Cable under the subsidiary’s ISU Plan.
SHARE OWNERSHIP
Mr. Audet is an important shareholder of both COGECO and Cogeco Cable. The following table summarizes
Mr. Audet’s total value of equity holdings as at August 31, 2014:
COGECO
Subordinate
Shares and
Multiple Shares
87,115
(1)
Incentive
Share Units
37,501
COGECO CABLE
Value(1)
$7,128,035
Subordinate
Voting Shares
48,740
Incentive
Share Units
17,501
Value(1)
$4,153,311
Value of
Total Portfolio
$11,281,346
Based on the closing prices of the subordinate shares and multiple shares of COGECO and the subordinate voting shares of
Cogeco Cable on the TSX as at August 29, 2014 (COGECO: $57.20; Cogeco Cable: $62.70).
The value of the total portfolio of shares and ISUs of COGECO and Cogeco Cable held by Mr. Audet as at
August 31, 2014 represents 11.9 times his 2014 base salary.
POST-RETIREMENT STOCK OWNERSHIP
The President and CEO is committed, upon retirement, to maintaining his stock ownership with a market value equal
to at least five times his final pre-retirement salary for at least the first year following his retirement.
COGECO INC.
63
CLAWBACK OF PRIOR AWARDS
Mr. Audet is subject to the Corporation’s clawback policy as described on page 62 of this Information Circular.
TOTAL COMPENSATION – FIVE-YEAR LOOK BACK
The chart below shows the evolution of the target compensation and realizable compensation of Mr. Audet in relation
to the total shareholder return (“TSR”) of COGECO over the last 5 years:
$5,000,000
350
$4,642,730
$3,882,461
300
Compensation
$4,000,000
$3,500,000
$3,262,753
250
$3,140,584
$3,000,000
200
$2,500,000
$2,000,000
150
Total Shareholder Return (TSR)
$4,322,278
$4,500,000
$1,500,000
100
$1,000,000
$500,000
2009
50
2010
Target Compensation
2011
2012
Realizable Compensation
2013
2014
Total Shareholder Return
Return (TSR)
(TSR) COGECO
of COGECO
The above chart shows a close correlation between the variation in Mr. Audet’s realizable compensation and the TSR
of COGECO for years 2010 to 2013 confirming a close pay-for-performance alignment. However, in 2014, Mr.
Audet’s realizable compensation decreased given that his annual bonus was lower because the Enterprise Value
creation achievement was lower in 2014. For the same five year period, COGECO’s TSR continued to grow at a
steady pace.
Base salary, pension and perquisites are the same under both target and realizable compensation. The value of the
annual bonus, the stock options and the ISUs differs between target and realizable compensation as specified in the
table below:
Compensation Element
Annual Bonus
Stock Options
Realizable Compensation
Actual bonus paid during the year
“In-the-money” value of the options based on
the actual share price on August 31, 2014
ISUs
Value of the units based on the actual share
price at the earlier of vesting date or
August 31, 2014
COGECO INC.
Target Compensation
Target bonus
Value on the date of the grant
(or Black-Scholes value)
Value of the units on the date of the grant
(using share price on the date of the grant)
64
PERFORMANCE GRAPH
The following graph compares the cumulative TSR on the subordinate shares of the Corporation with the cumulative
(1)
total return of the S&P/TSX Composite Index of the TSX for the five-year period ended August 31, 2014 :
CUMULATIVE TOTAL RETURN FOR FIVE YEARS
YEARS ENDED AUGUST 31
TOTAL RETURN INDEX
INVESTMENT ON AUGUST 31, 2009
2009 = $100.0
300.0
300,0
275.0
275,0
250.0
250,0
225.0
225,0
200.0
200,0
175.0
175,0
150.0
150,0
125.0
125,0
100.0
100,0
2009
2010
2011
2012
Cogeco
Years ended August 31
Years
ended August 31
Cogeco
Cogeco
S&P/TSX Composite Index
(1)
2014
2009
$
2009
$
2012
2013
2014
2010
$
2011
$
2012
$
$
2013
$
$
2014$
$
157.8
109,6
109.6
216.8
117,5
117.5
181.1
109,9
109.9
241.2
116,4
116.4
301.4
143,8
143.8
2010
$
100,0
2011
$
157,8
100.0
100,0
100.0
2013
216,8
181,1
241,2
301,4
Assuming that the initial value of the investment in subordinate shares of the Corporation on the TSX was $100.0 on
August 31, 2009. Values include dividends paid but exclude brokerage fees and all income taxes.
TRENDS BETWEEN NEOS’ PAY AND TOTAL SHAREHOLDER RETURN
The following graph illustrates the annual change in cumulative TSR of COGECO with the realizable total
compensation of the NEOs over the last 5 years, confirming a pay-for-performance alignment for the years 2010 to
2013. However, in 2014, the NEOs realizable compensation decreased given that their annual bonuses were lower
because the Enterprise Value creation achievements were lower in 2014. For the same period, COGECO’s TSR
continued to grow at a steady pace:
325.0
300.0
275.0
250.0
225.0
200.0
175.0
150.0
125.0
100.0
75.0
50.0
2009
2010
2011
2012
NEOs Realizable Total Compensation Index
2013
2014
Total Shareholder Return (TSR) COGECO
COGECO INC.
65
SUMMARY COMPENSATION TABLE
The following summary compensation table provides information as to the total compensation for the last three fiscal
years paid, awarded to and earned by each of the NEOs:
Name and Principal
Position
Option
Awards(8)
$
Annual
Incentive
Plans
$
Pension
Value
$
Year
Salary
$
Share-Based
Awards
$
All Other
Compensation(11)
$
Total
Compensation
$
2014
2013
2012
950,000
920,000
890,000
1,024,740
623,208(7)
742,737(7)
(7)
332,915
219,916
244,086
1,263,500
1,536,400
676,400
—
431,000(10)
172,000(10)
(9)
—
—
—
3,571,155
3,730,524
2,725,223
Louise St-Pierre(2)
President & CEO,
Cogeco Cable
Canada
2014
2013
2012
600,000
500,000
480,000
536,070
(5)
270,936
(5)
364,952
(5)
178,857
89,523
122,595
571,200
487,500
187,200
825,000
(10)
430,000
(10)
247,000
(10)
—
—
—
2,711,127
1,777,959
1,401,747
Pierre Gagné(1)(3)
Senior Vice President
and Chief Financial
Officer
2014
2013
2012
474,723
502,000
487,000
356,230(7)
224,143(7)
293,380(7)
116,483
78,495
96,088
414,456
544,921
233,760
399,000(10)
437,000(10)
164,000(10)
2,179,958(12)
—
—
3,940,850
1,786,559
1,274,228
Edward T. Holleran(4)
President & CEO,
Atlantic Broadband
2014
2013
671,950
474,885
556,110(5)
351,915(6)
180,360
117,588
514,042
550,851
2,700(10)
475(10)
—
—
1,925,162
1,495,714
Philippe Jetté
Senior Vice President,
Chief Technology and
Strategy Officer
2014
2013
2012
350,000
320,000
309,000
140,280(5)
91,584(5)
124,852(5)
48,096
30,490
41,969
209,475
237,600
88,992
85,000(10)
71,000(10)
53,000(10)
—
—
832,851
750,674
617,813
(1)
Louis Audet
President and Chief
Executive Officer
(1)
The services of the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer are
provided to Cogeo Cable under the terms of the management agreement described under the heading “Interest of
Management and Directors in Certain Transactions”. The annual compensation described above is paid by COGECO and
represents the services provided by these two senior executive officers to COGECO and Cogeco Cable. There is no allocation
of such compensation made between the two companies. However, certain grants were made to them in options to purchase
subordinate shares of Cogeco Cable and ISUs of Cogeco Cable as noted in the table and for which a charge was made to
COGECO as referred to under “Interest of Management and Directors in Certain Transactions”.
(2)
Compensation payable by Cogeco Cable Canada GP Inc.
(3)
Mr. Gagné ceased to be an officer and employee of the Corporation on July 21, 2014. The salary shown in the table was
earned from September 1, 2013 to July 21, 2014.
(4)
Compensation payable by Atlantic Broadband. Mr. Holleran joined the NEO’s following the acquisition of Atlantic Broadband on
November 30th, 2012. Therefore, the salary shown for fiscal year 2013 was calculated on a prorated basis. The compensation
information of Mr. Holleran is expressed in Canadian dollars using an exchange rate of US$1.00 = C$1.053 for 2013 and of
US$1.00 = C$1.0873 for 2014.
(5)
Amounts shown in 2014, 2013 and 2012 represent ISUs of Cogeco Cable granted at a share price of $50.10, $38.16 and
$48.02, respectively, which were the closing prices of Cogeco Cable subordinate voting shares on October 30, 2013,
October 31, 2012 and October 25, 2011, respectively.
(6)
Amounts shown represent ISUs and stock options of Cogeco Cable granted at a share price of $40.45, which was the closing
price of Cogeco Cable’s subordinate voting shares on January 16, 2013.
(7)
Amounts shown in 2014, 2013 and 2012 represent ISUs of COGECO granted at a share price of $48.20, $33.49 and $44.85,
respectively, and ISUs of Cogeco Cable granted at a share price of $50.10, $38.16 and $48.02, respectively, which were the
closing price of COGECO’s subordinate shares and Cogeco Cable’s subordinate voting shares, respectively, on October 30,
2013, October 31, 2012 and October 25, 2011, respectively.
COGECO INC.
66
(8)
The grant date fair value of option awards on subordinate voting shares of Cogeco Cable made in fiscal year 2014 was
calculated using the Black-Scholes model. The Black-Scholes factor has been determined using a 3-year average volatility and
1-year dividend yield at the date of grant. The Black-Scholes factor used for fiscal year 2014 is 15% of the exercise price. This
methodology for determining the fair value of the grants is used as it corresponds to the compensation value which the Board
intended to provide to the NEOs within the Corporation’s total compensation policy. This method is consistent with the method
used by the Committee’s compensation advisors when valuing the equity-based awards of other companies for competitive
total compensation comparison purposes. The amount of the differences between fair value of the awards (set forth in the
option-based awards column of the summary compensation table (SCT)) and the fair value determined for purposes of the
financial statements are set forth below:
SCT Values
$
332,915
178,857
116,483
180,360
48,096
Louis Audet
Louise St-Pierre
Pierre Gagné
Edward T. Holleran
Philippe Jetté
*
(9)
Accounting Values
$
467,808
251,328
163,680
253,440
67,584
The difference between the grant date fair value for accounting purposes and the grant fair value for compensation
purposes as disclosed in the SCT is due to the use of different assumptions and estimates.
The accrued obligation has been calculated taking into account the limit on pensionable earnings for the President and CEO.
Given that Mr. Audet reached the assumed retirement age at the beginning of the fiscal year, he was valued as being entitled
to an immediate annuity and the service cost is nil based on this methodology. Moreover, as there are no plan changes and
pensionable earnings have been as expected, the pension value indicated in this column, which represents the compensatory
change in accrued obligation, is assigned a value of 0.
(10) Pension value. See the heading “Defined Benefit Plan Table”.
(11) Benefits not exceeding the lesser of $50,000 or 10% of salary are not disclosed.
(12) Mr. Gagné received a severance arrangement that equals two times the following pay elements: annual salary plus car
allowance plus 2013 bonus earned. It excludes accelerated vesting of ISUs of COGECO and Cogeco Cable upon termination
of his employment, which was reported as compensation in prior years.
INCENTIVE PLAN AWARDS
The table below describes award-by-award, all unexercised options and all non-vested ISUs at the financial year
ended August 31, 2014. By virtue of these option awards and subject to the applicable vesting restrictions, the NEOs
have the right to acquire subordinate shares of the Corporation or subordinate voting shares of Cogeco Cable, as
applicable, under the relevant Option Plan.
There have been no awards of stock options under COGECO’s Option Plan to any of the NEOs since 2001. Any
awards of stock options to these NEOs have been granted under the Option Plan of Cogeco Cable.
Stock Option Awards
Number of
Securities
Underlying
Unexercised
Options(1)
Value of
Unexercised
In-the-Money
Options(3)
$
Number of
Shares or
Units of
Shares
that
have not
Vested
Market or
Payout
Value of
ShareBased
Awards that
have not
Vested
$
Option
Exercise
Price(2)
$
Option
Expiration Date
18,000
29.05
October 21, 2015
605,700
17,500(1)
1,097,250
60,500
11,200
13,200
21,619
20,000
22,100
33,900
44,300
26.63
49.82
34.46
31.82
39.00
48.02
38.16
50.10
October 13, 2016
October 26, 2017
October 29, 2018
October 29, 2019
October 27, 2020
October 26, 2021
November 1, 2022
October 30, 2023
2,182,235
144,256
372,768
667,594
474,000
324,428
831,906
558,180
37,500(4)
2,145,000
Name
Louis Audet
Share-Based Awards
COGECO INC.
Market or
Payout
Value of
Vested
ShareBased
Awards not
Paid out or
Distributed
$
—
—
67
Stock Option Awards
Number of
Securities
Underlying
Unexercised
Options(1)
Name
Louise St-Pierre
Pierre Gagné(5)
Edward T. Holleran
Philippe Jetté
Share-Based Awards
Number of
Shares or
Units of
Shares
that
have not
Vested
Market or
Payout
Value of
ShareBased
Awards that
have not
Vested
$
Market or
Payout
Value of
Vested
ShareBased
Awards not
Paid out or
Distributed
$
Option
Exercise
Price(2)
$
Option
Expiration Date
Value of
Unexercised
In-the-Money
Options(3)
$
6,800
1,979
4,840
11,100
13,800
23,800
49.82
31.82
39.00
48.02
38.16
50.10
October 26, 2017
October 29, 2019
October 27, 2020
October 26, 2021
November 1, 2022
October 30, 2023
87,584
61,112
114,708
162,948
338,652
299,880
25,400(1)
1,592,580
—
—
—
—
—
—
—
—
17,100
24,000
40.45
50.10
January 17, 2023
October 30, 2023
380,475
302,400
19,800(1)
1,241,460
2,800
3,800
4,700
6,400
44.00
48.02
38.16
50.10
April 7, 2021
October 26, 2021
November 1, 2022
October 30, 2023
52,360
55,784
115,338
80,640
—
7,800(1)
489,060
(1)
Underlying security: subordinate voting shares of Cogeco Cable.
(2)
Based on the closing price on the TSX on the trading day preceding the date of grant of the options of COGECO or Cogeco
Cable, as applicable.
(3)
The value of unexercised in-the-money options of Cogeco Cable at year-end is the closing price of the underlying security for
the options on the TSX on August 31, 2014, which was $62.70, less the exercise price of the options.
(4)
Underlying security: subordinate shares of COGECO.
(5)
Mr. Gagné ceased to be an officer and employee of the Corporation on July 21, 2014.
SHARE OPTIONS – VALUE REALIZED BY NEOs DURING THE YEAR
The following table shows the number of options exercised and the amounts realized by NEOs during the financial
year ended August 31, 2014.
Name
Louis Audet
Pierre Gagné(1)
Louise St-Pierre
(1)
Subordinate
shares underlying
share options
exercised during
the year
21,500
9,000
6,600
3,900
6,300
2,420
3,480
3,180
58
18,000
7,260
3,600
3,957
Share option
exercise price
$
21.50
26.63
34.46
31.82
49.82
38.16
48.02
39.00
31.82
26.63
39.00
34.46
31.82
Exercise date
27/02/2014
04/11/2013
21/11/2013
21/11/2013
30/07/2014
31/07/2014
31/07/2014
31/07/2014
31/07/2014
04/11/2013
21/02/2014
21/02/2014
21/02/2014
Market price of
subordinate shares
on exercise date
$
53.96
50.51
48.40
48.40
61.00
61.00
61.00
61.00
61.00
50.51
53.22
53.22
53.22
Value realized
during the year
$
697,890
214,920
92,004
64,662
70,434
55,273
45,170
69,960
1,692
429,840
103,237
67,536
84,679
Pierre Gagné was entitled to exercise all his vested stock options at termination of his employment on July 21, 2014.
COGECO INC.
68
INCENTIVE PLAN AWARDS – VALUE VESTED OR EARNED DURING THE YEAR
The following table summarizes for each of the NEOs the aggregate value earned upon vesting of options and ISUs
during the financial year ended August 31, 2014:
Option-Based Awards(1)
Value Vested during
the Year
$
206,623
96,265
60,143
32,661
20,336
Name
Louis Audet
Louise St-Pierre
Pierre Gagné(3)
Edward T. Holleran
Philippe Jetté
ISUs of COGECO(1) Value
Vested during the Year
$
630,200
—
911,702
—
—
ISUs of Cogeco Cable(2)
Value Vested during the
Year
$
273,672
498,474
458,585
—
134,044
(1)
Underlying security: subordinate shares of COGECO.
(2)
Underlying security: subordinate voting shares of Cogeco Cable.
(3)
Pierre Gagné was entitled to payment of all his ISUs at termination of his employment on July 21, 2014.
DEFERRED COMPENSATION PLANS
The following describes the mid- and long-term incentive programs for NEOs:
Plan
Stock Options
Grants of stock
options are based
on a percentage
of base salary
mid-points or
actual base salary
Performance
Period
10 years
Administration of the Plan
Vesting and Payout
●
● Stock options vest in equal annual instalments over a fiveyear period (if granted on or after October 29, 2009) or
four-year period (if granted before October 29, 2009).
● The Board of Directors may, at its discretion, accelerate
the vesting of options issued from time to time under the
Option Plan in the event of any sale of the assets of the
Corporation or of Cogeco Cable, or a merger,
amalgamation or absorption into another entity,
distribution of assets or takeover bid for shares of the
Corporation or of Cogeco Cable.
● The holder of options is not entitled to exercise any option
granted, whether or not vested, if his or her employment
is terminated for cause.
● The holder of options is entitled to exercise all vested
options if his or her employment is terminated for any
other reason.
● An option holder can elect to authorize a third party,
during the last six months of the exercise period for his or
her options, in the sole discretion of such third party, to
exercise any of his or her options that remain
unexercised, to sell, subject to certain provisions of the
Option Plan, all of the subordinate shares purchased
upon such exercise and to remit to the option holder the
proceeds of sale less the amount paid to effect such
exercise and any related brokerage fees. This automatic
disposition mechanism is meant to relieve an option
holder, who might be constrained during the last six
months by blackout periods for trading or a lengthy period
pending disclosure of material information by the
Corporation from having options expire unexercised.
●
●
●
The number of options granted is based on:
- the dollar value of the award
- the Black-Scholes valuation of the option and
- the average closing stock price of the
Corporation for the previous 12-month period
ending August 31.
The exercise price is not less than the closing price
of the subordinate shares of the Corporation on the
TSX on the trading day preceding the date of grant
of the options.
The options are not assignable.
No single person may hold options covering more
than 5% of the subordinate shares then issued and
outstanding.
COGECO INC.
69
Performance
Period
Plan
ISUs
Grants of units are
based on a
percentage of
base salary midpoints or actual
base salary
3 years less 1 day
(subject to
provisions for
extension in limited
circumstances)
Administration of the Plan
Vesting and Payout
●
The number of ISUs granted is based on:
- the dollar value of the award and
ending August 31.
The assets of the plan are held and administered by
Computershare Trust Company of Canada as
trustee.
The value of an ISU is based on the closing price of
a subordinate share of the Corporation on the TSX
on the trading day preceding the date of grant.
The Corporation pays an amount to a trustee
sufficient to enable the trustee to purchase shares
of equivalent value to the ISUs to be held for the
benefit of the participants.
The participants, by holding ISUs, are not
considered shareholders of the Corporation and do
not have any rights as a shareholder as a result.
● ISUs vest at the end of the 3-year period less 1 day
(except in case of blackout, in which case it shall be the
next day following the expiration of the blackout).
● The holder of ISUs is entitled to payment of his or her
ISUs at the end of the above-mentioned term only if he or
she is still actively employed with the Corporation or
Cogeco Cable.
● The holder of ISUs is not entitled to payment of any ISUs
if his or her employment is terminated for cause or in case
of resignation.
● The holder of ISUs is entitled to payment of all ISUs in the
case of death, permanent disability, normal retirement or
termination of employment not for cause or a change of
control of the Corporation or Cogeco Cable.
The number of PSUs granted is based on:
- the dollar value of the award and
ending August 31.
The assets of the plan are held and administered by
Computershare Trust Company of Canada as
trustee.
The value of a PSU is based on the closing price of
a subordinate share of the Corporation on the TSX
on the trading day preceding the date of grant.
The Corporation pays an amount to a trustee
sufficient to enable the trustee to purchase shares
of equivalent value to the PSUs to be held for the
benefit of the participants.
The participants are entitled to receive dividend
equivalents in the form of additional PSUs but only
with respect to vested PSUs
The participants, by holding PSUs, are not
considered shareholders of the Corporation and do
not have any rights as a shareholder as a result.
● PSUs vest at the end of the 3-year period less 1 day
(except in case of blackout, in which case it shall be the
next day following the expiration of the blackout).
● The holder of PSUs is entitled to payment of his or her
PSUs at the end of the above-mentioned term only if he
or she is still actively employed with the Corporation or
Cogeco Cable and performance hurdles have been met
or exceeded
● The holder of PSUs is not entitled to payment of any
PSUs if his or her employment is terminated for cause or
in case of resignation.
● In the case of death, permanent disability, normal
retirement or termination of employment not for cause, the
holder of PSUs is entitled to payment of the PSUs in
proportion of the time of employment between the date of
grant and the date of termination during the 3-year
performance period. The holder of the PSUs is entitled to
acceleration of the PSUs in the case of a change-incontrol of the Corporation or of Cogeco Cable.
●
●
●
●
PSUs (effective
for fiscal 2015)
Grants of units are
based on a
percentage of
base salary midpoints or actual
base salary
3 years less 1 day
(subject to
provisions for
extension in limited
circumstances)
●
●
●
●
●
●
STOCK OPTION PLAN
The Option Plan entitles the Board of Directors of the Corporation to grant to key full time employees and officers of
the Corporation and of its subsidiaries options to acquire up to 1,545,700 subordinate shares representing 10.3% of
the outstanding subordinate shares of the Corporation. The following table summarizes the status of the share
reserve as at August 31, 2014:
Issuable pursuant to options outstanding
Issuable pursuant to options available for granting
Reserved for issuance(1)
Issuable pursuant to options granted during year ended August 31, 2014(2)
(1)
Referred to as “overhang ratio”.
(2)
Referred to as “burn rate”.
Number of
Subordinate Shares
NIL
434,149
434,149
NIL
% of Outstanding
Shares
0%
2.9%
2.9%
0%
The exercise price of any option granted under the Option Plan is determined by the Board of Directors on the date of
grant and must not be less than the closing price of the subordinate shares of the Corporation on the TSX on the
trading day preceding the date of the grant of the option.
The options generally become vested for the holder in successive equal blocks over a period of up to five years after
they are granted. The Board of Directors of the Corporation may, at its discretion, accelerate the vesting of options
issued from time to time under the Option Plan in the event of the sale of the assets of the Corporation or of Cogeco
COGECO INC.
70
Cable, or a merger, amalgamation or absorption into another entity, distribution of assets or takeover bid for shares of
the Corporation or of Cogeco Cable.
The options must be exercised within their term, which shall be no longer than ten years following their date of grant.
Any options granted to an employee who is terminated for cause shall terminate immediately and no portion of the
terminated options will be exercisable. If an employee is terminated for any other reason than for cause, any vested
options granted to the employee may be exercised for a period of 30 days following the date of termination, or within
an additional 150 days at the discretion of the President and Chief Executive Officer of the Corporation. Upon
retirement, an employee may exercise options, to the extent that the employee was entitled to do so at the time of
retirement, at any time within 48 months following retirement, according to an amendment to the Plan approved by
the Board of Directors on July 11, 2012. Upon the death of an employee, to the extent that the employee was entitled
to do so at the time of death, his or her personal representatives may exercise the employee’s options at any time
within 12 months following the death of the employee. The options are not assignable.
Under amendments to the Option Plan approved at the annual and special meeting in December, 2006, provision
was made for an automatic disposition mechanism which allows an option holder to elect to authorize a third party,
during the last six months of the exercise period for his or her options, in the sole discretion of such third party to
exercise any of his or her options that remained unexercised, to sell all of the subordinate shares purchased upon
such exercise and to remit to the option holder the proceeds of sale less the amount paid to effect such exercise and
any related brokerage fees. This mechanism is meant to protect an option holder, who might be constrained from
trading during the last six months by blackout periods from having options expire unexercised.
Also, these amendments allow the Board of Directors to make certain types of amendments without shareholder
approval, but shareholder approval is required for the following amendments:
(i)
Any increase in the number of subordinate shares reserved for issuance under the Option Plan;
(ii)
Any reduction in the purchase price or the extension of the expiry of an option held by an insider;
(iii)
The addition of a deferred or restricted share unit or other provision which results in an option holder
being issued subordinate shares by the Corporation while no cash consideration is received by the
Corporation; and
(iv)
Any change in the restrictions on the non-negotiability and non-transferability of options under the Plan.
In recent years, no options on subordinate shares of the Corporation have been granted to NEOs. No share options
were granted to Directors of the Corporation as such.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table summarizes, as of August 31, 2014, the equity compensation plans pursuant to which equity
securities of the Corporation may be issued:
Plan Category
Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants and Rights
Option plan of the Corporation
approved by shareholders
Total
0
0
Weighted-Average Price of
Outstanding Options,
Warrants and Rights
$
0
0
Number of Securities
Remaining Available for
Future Issuance under
Plans (excluding Securities
Reflected in the
First Column)
434,149
434,149
The Option Plan of the Corporation is the only compensation plan pursuant to which equity securities
(i.e.: subordinate shares) of the Corporation may be issued. It is described under the subheading “Deferred
Compensation Plans”.
COGECO INC.
71
RETIREMENT AGREEMENTS
BASIC PLAN
The Corporation and its subsidiary, Cogeco Cable, provide to their Canadian senior executives a contributory
defined-benefit pension plan (the “Basic Plan”). The Corporation’s plan and Cogeco Cable’s plan are identical. The
main provisions may be summarized as follows:
Provision
Member contributions
Normal retirement age
(without pension reduction)
Pension formula
Early retirement age
Reduction for retirement before 62
Coordination with public plans
Form of pension
Indexation
Description
Maximum amount of $3,500 per year
62 years
Based upon the compensation level of the senior executives, the normal pension upon
retirement is equal to the maximum pension fixed by the Income Tax Act (Canada).
Not before age 52
Pension reduced by 0.5% for each month by which the actual retirement date precedes the
normal retirement date.
No
With no eligible spouse at retirement:
Guarantee of 120 monthly payments. Other options available on an actuarial equivalent
basis.
With eligible spouse at retirement:
Lifetime pension to the spouse equal to 60% but reduced on an actuarial basis to be
equivalent to the pension with guarantee of 120 monthly payments. Other options available
on an actuarial equivalent basis.
None
POST-RETIREMENT ADDITIONAL ALLOCATION PROGRAM FOR DESIGNATED SENIOR EXECUTIVES
In addition to the retirement plan in force, the Corporation and its subsidiary, Cogeco Cable, maintain a
post-retirement additional allocation program for Canadian designated senior executives (the “Additional Allocation
Program”), which is intended to provide additional retirement income in excess of the amount payable under the
Basic Plan. The Corporation’s program and Cogeco Cable’s program are identical. The terms and conditions of the
Additional Allocation Program vary depending on whether the designated senior executive started his or her
membership before or after September 1, 2002. The Additional Allocation Program is partly funded with a retirement
compensation arrangement.
Provision
Member contributions
Normal retirement age
(without pension reduction)
Pension formula
Average salary
Pensionable salary
Early retirement age
Reduction for retirement before 62
Coordination with public plans
Form of pension
Indexation
Description
None
62 years
2% of average salary minus the maximum pension fixed by the Income Tax Act
(Canada), for each service year credited under this program
Based on five highest pensionable salaries earned by the designated senior executive
Beginning of membership before September 1, 2002:
Base salary as well as all bonuses and commissions and the taxable portion of any car
allowance paid during the relevant fiscal year. See Cap on Pensionable Earnings for
Mr. Louis Audet below.
Beginning of membership from September 1, 2002:
Base salary for the relevant fiscal year
Not before age 52
Pension reduced by 0.5% for each month by which the actual retirement date precedes
the normal retirement date.
No
Same form of pension as Basic Plan
None
COGECO INC.
72
CAP ON PENSIONABLE EARNINGS FOR MR. LOUIS AUDET
In November 2012, the Board has adopted a provision that will limit pensionable earnings for the President and CEO,
effective September 1, 2012. Thus, and for the exclusive purpose of calculating Mr. Audet’s average salary,

His annual base salary increase will be limited to the lower of (i) the actual salary increase or (ii) 2%, and

His annual bonus will be limited to the lower of (i) the actual bonus or (ii) the target bonus.
U.S. PENSION PLAN
Mr. Edward T. Holleran participates in the U.S. Pension Plan, a defined contribution retirement plan which complies
with Section 401(k) of the U.S. Internal Revenue Code (“IRC”). This plan is open to most all non-union employees.
Participants may make voluntary tax deferred contributions to the U.S. Pension Plan subject to limitations imposed by
the IRC. For employees meeting a three month service requirement, the employer matches 50% of the employees’
contributions up to a maximum of 5.0% of the employees’ compensation. The matching contribution is subject to
limitations imposed by the IRC. Contributions from highly compensated employees may be limited to less than
statutory limits in order to meet the IRC non-discrimination requirements. The employer may also make a
discretionary profit sharing contribution to the plan. For the year ended August 31, 2014, there was no profit sharing
contribution. All employer’s contributions are gradually vested over 6 years. They are however 100% vested if the
participant is employed on or after the early or normal retirement date or in case of death or disability. All
contributions are invested in various investment funds as selected by the participant.
DEFINED BENEFIT PLAN TABLE
The following table details, for each of the NEOs, the number of years of credited service at year end of
August 31, 2014, the annual lifetime benefits payable based on the years of credited service at year end and
projected at age 65, the accrued obligation at the start of the year and at year end and the difference between these
last two amounts being split between compensatory and non-compensatory changes:
Name
(A)
Louis Audet
Louise St-Pierre
Pierre Gagné(1)
Philippe Jetté
(1)
Years of
Credited
Service
At Year
End
#
(B)
33.3/33.3
15.3/15.3
18.7/18.7
3.5/3.5
Annual Lifetime
Benefits Payable
At Year
At
End
Age 65
$
$
(C1)
(C2)
1,202,000
1,268,000
252,000
353,000
328,000
328,000
22,000
114,000
Accrued
Obligation
At Start
of Year
$
(D)
17,177,000
3,408,000
4,092,000
187,000
Compensatory
NonCompensatory
$
(E)
0
825,000
399,000
85,000
$
(F)
1,382,000
605,000
-211,000
47,000
Accrued
Obligation
At Year
End
$
(G)
18,559,000
4,838,000
4,280,000
319,000
Pierre Gagné ceased to be an officer and employee on July 21, 2014. The amount shown in column (C2) corresponds to the
pension accrued to the member as at the termination date. This amount is payable at age 62. The amount shown in
column (G) corresponds to the value of this pension.
In the preceding table, all figures are for the Basic Plan and the Additional Allocation Program combined, except for
the first figure in column (B) which corresponds to the years of credited service in the Basic Plan while the other
figure corresponds to the years of credited service in the Additional Allocation Program. The annual lifetime benefits
illustrated in columns (C1) and (C2) are estimated on the basis of the average compensation of the NEO as at
August 31, 2014 and on the basis of the fiscal limit applicable for 2014. The compensatory change in
column (E) corresponds to the service cost net of employee contributions plus the impact of the differences between
actual and estimated earnings on the obligation and the service cost. It also includes the impact of the change made
to the target bonus of Ms. Louise St-Pierre. The non-compensatory change in column (F) includes all items that are
not compensatory, such as changes in actuarial assumptions, employee contributions and interest on the obligation
and the service cost.
Note that the accrued obligations and the compensatory and non-compensatory changes were calculated using the
same assumptions and methods as those used for the Corporation's financial statements, in particular, a discount
COGECO INC.
73
rate of 4.5% applicable at the beginning of fiscal year 2014 and of 4.0% at year end. The amounts shown in the table
above are estimates and are based on assumptions that can vary over time.
DEFINED CONTRIBUTION PLAN TABLE
The following table details the amount accumulated by Mr. Edward T. Holleran in the U.S. Pension Plan, at the start
of the year and at year end, and the amount contributed by the employer.
Name
(A)
Edward T. Holleran
Accumulated value
at Start of Year
(B)
$125,600
Accumulated value
at Year End
(D)
$155,600
Compensatory
(C)
$2,700
The accumulated value at Start of Year corresponds to the amount as at September 30, 2013 and the accumulated
value at Year End to the amount as at September 30, 2014. The compensatory amount in column (C) corresponds to
the amount of contributions made by the employer during the fiscal year. These contributions were made from
January to September 2014. All amounts have been converted to Canadian dollars using the Bank of Canada’s
foreign exchange rate of US$1.00 = C$1.053 in 2013 and of US$1.00 = C$1.0858 in 2014. This corresponds to the
foreign exchange rate on the last trading day of each respective fiscal year. The accumulated value evolves from one
year to the other with employee and company contributions and with investment earnings and an allocation of
administrative expenses and it also takes into account the foreign exchange rate.
RETIREMENT PLANS GOVERNANCE
The Board has a process in place to review the sound governance of the retirement plans of the Corporation. The
Board delegates this responsibility to the Human Resources Committee which, as stated in its charter, is responsible
to review periodically trends and developments in the pension area in Canada and to make recommendations to the
Board on all pension retirement plans of the Corporation and on any material amendments to these plans. More
specifically, the Human Resources Committee is also responsible for monitoring and reviewing, as appropriate, the
administration, funding and investment of the retirement plans.
The Human Resources Committee reviews, once a year, the performance of the investment manager of the defined
benefit pension plans. It is worth noting that the defined benefit pension plans of the Corporation do not cover many
members compared to other companies and are not available to new participants other than designated senior
executives and, as such, represent a lower risk for the Corporation.
The Human Resources Committee also reviews, once a year, the administration and performance of the defined
contribution plan of the Ontario employees and the registered retirement savings plan of the Québec employees not
participating in the defined benefit pension plans noted above.
TERMINATION AND CHANGE OF CONTROL BENEFITS
One NEO, Mr. Gagné, ceased to be an officer and employee of the Corporation on July 21, 2014.
Two of the other NEOs, Ms. St-Pierre and Mr. Jetté, entered into employment contracts for no fixed term with Cogeco
Cable. Mr. Holleran entered into an employment contract for no fixed term with Atlantic Broadband. Pursuant to these
contracts, each of these individuals, in addition to basic salary, is eligible for an annual bonus determined on the
basis of performance criteria described above. Each may receive stock options and/or ISUs and/or PSUs pursuant to
the long-term incentive plans described above.
The employment contracts for Ms. St-Pierre and Mr. Jetté also provide, in the event of involuntary termination of
employment other than for cause, for the payment of amounts of up to 12 months of the annual compensation of the
previous year. Each individual is also eligible for the Senior Management Special Remuneration Plan in the event of a
change of control in the Corporation (the “Special Plan”) which was established in 2000 and amended in 2010, 2011,
2012 and 2013. It is intended to provide indemnity to the senior management by way of severance allowance,
continuity of benefits, acceleration of rights to exercise options and related protections in the event of a change of
control of the Corporation which is followed by a termination of employment (i.e. « double trigger »). For such
purpose, a “change of control” would arise, for example, if the Audet family should cease to have the right to cast the
majority of votes attaching to the voting shares of COGECO or if COGECO should cease to have the right to cast a
majority of the votes attaching to the voting shares of Cogeco Cable. The protections under the Special Plan apply, in
COGECO INC.
74
terms of eligibility, to the senior management of the Corporation, including the NEOs and include an indemnity by way
of severance (including salary and bonus) of 24 months.
The employment contract for Mr. Holleran provides, in the event of involuntary termination of employment other than
for cause, an amount equal to one time the Annual Base Salary plus one time the Annual Cash Bonus at target.
The following table summarizes the nature of the benefits offered as at August 31, 2014 according to the type of
termination:
Type of
Termination
Retirement
Resignation
Termination
without cause
Termination
without cause
following a
change of
control
(Not
applicable to
Mr. Holleran)
Termination
with cause
Severance
Bonus
Options
ISUs
Benefits
Pension
No extra
payment
No extra
payment
Annual salary
plus target
bonus plus car
allowance times
factor based on
years of service
(Salary plus
target bonus) x
2 years
No extra
payment
No extra
payment
No extra
payment
No extra
payment
No extra
payment
No extra
payment
No extra
payment
No extra
payment
Non-vested
units become
vested
No extra
payment
No extra
payment
No extra
payment
No extra payment
No extra
payment
Non-vested
options become
vested following
change of
control.
Accelerated
right to exercise
Non-vested
units become
vested
following
change of
control.
Value of the
payment of a
monthly pension
for 2 additional
years
Nothing payable
Nothing
payable
Nothing payable
Nothing
payable
Cost of employer
premiums for
group insurance
x 2 years + car
allowance for 1
year + cost of
financial
planning
services and
relocation
Nothing payable
No extra payment
No extra payment
No extra payment
for basic plan and
U.S. Pension
Plan. Additional
allocation
program: nothing
payable
The following tables summarize the estimated payments and value of other benefits offered upon termination of
employment at August 31, 2014, including change of control for the NEOs other than Mr. Gagné, who ceased to be
an officer and employee of the Corporation on July 21, 2014:
Options
$
Type of termination
Bonus
Severance
$
$
COGECO
Louis Audet – President and Chief Executive Officer
Retirement or
Resignation
Termination without
cause(1)
Termination without
cause following a
change of control
Termination with cause
ISUs
$
Cogeco
Cable
COGECO
Cogeco
Cable
Benefits
$
Pension Total Payout
$
$
0
0
0
0
0
0
0
0
0
0
0
0
0
2,145,000
1,097,250
0
0
3,242,250
3,800,000
0
0
1,741,487
2,145,000
1,097,250
68,734
1,110,000
9,962,471
0
0
0
0
0
0
0
0
0
COGECO INC.
75
Options
$
Type of termination
Severance
$
Bonus
$
COGECO
ISUs
$
Cogeco
Cable
COGECO
Cogeco
Cable
Benefits
$
Pension Total Payout
$
$
Louise St-Pierre – President & CEO, Cogeco Cable Canada
Retirement or
Resignation
0
0
0
0
0
0
0
0
0
Termination without
cause
1,040,800
0
0
0
0
1,592,580
0
0
2,633,380
Termination without
cause following a
change of control
2,040,000
0
0
844,390
0
1,592,580
62,943
482,000
5,021,913
0
0
0
0
0
0
0
0
0
Edward T. Holleran – President & CEO, Atlantic Broadband
Retirement or
Resignation
Termination without
(3)
cause
Termination without
cause following a
change of control
0
0
0
0
0
0
0
0
0
1,175,913
0
0
0
0
1,241,460
0
0
2,417,373
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Philippe Jetté – Senior Vice President, Chief Technology and Strategy Officer
Retirement or
Resignation
Termination without
cause
Termination without
cause following a
change of control
0
0
0
0
0
0
0
0
0
498,300
0
0
0
0
489,060
0
0
987,360
1,015,000
0
0
227,325
0
489,060
61,983
132,000
1,925,368
0
0
0
0
0
0
0
0
0
(1)
There is no agreement currently in place providing for a severance to Mr. Audet should his employment be terminated without
cause. However, in the unlikely event that Mr. Audet's employment be terminated without cause, a severance payment would
be paid according to normal human resources practices.
(2)
The severance amount includes the annual incentive amount paid during the most recent fiscal year.
(3)
Excludes car allowance fees.
DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
The Corporation participates in Directors’ and officers’ (“D&O”) liability insurance of the COGECO Group of
companies with a policy limit of $80,000,000 (including the “Side A” DIC policy of $20 million mentioned below),
subject to a maximum deductible of $250,000 per loss. The Corporation’s share of the premiums payable for this
coverage is approximately $90,300 per annum. Under this insurance coverage, the Corporation is reimbursed for
payments made under corporate indemnity provisions on behalf of its Directors and officers. Protection is provided to
Directors and officers for acts, errors or omissions done or committed during the course of their duties as such.
Excluded from coverage under the policy are illegal acts and those acts which result in personal profit.
In fiscal 2014, a “Side A” DIC policy of $20 million was added to the D&O insurance policy. The “Side A” DIC policy
sits above the Corporation’s traditional Directors and officers tower and provides coverage for the Directors and
officers in case they would not be indemnified by the Corporation. It has no pollution exclusion, no clean-up costs
exclusion and no bodily injury/property damage exclusion.
INDEBTEDNESS OF DIRECTORS AND OFFICERS
It is the policy of the Corporation not to give any loan to its Directors, officers, employees or their associates, other
than where such is routine indebtedness within the meaning of Canadian securities regulations, and no such loan
was made during the last fiscal year.
COGECO INC.
76
INTEREST OF MANAGEMENT AND DIRECTORS IN CERTAIN TRANSACTIONS
COGECO holds 32.0% of its subsidiary Cogeco Cable’s equity shares, representing 82.5% of the Cogeco Cable’s
voting shares. On September 1, 1992, COGECO executed a Management Agreement with Cogeco Cable under
which the Corporation agreed to provide certain executive, administrative, legal, regulatory, strategic and financial
planning services and additional services to Cogeco Cable and its subsidiaries (the “Management Agreement”).
These services are provided by COGECO’s senior executives, including the President and Chief Executive Officer,
the Senior Vice President and Chief Financial Officer, the Vice President, Regulatory Affairs and Copyright, the
Vice President, Corporate Affairs, Chief Legal Officer and Secretary, the Vice President, Corporate Development, the
Vice President and Treasurer, the Vice President, Public Affairs and Communications and the Vice President, Internal
Audit and Risk Management. No direct remuneration is payable to such senior executives by Cogeco Cable.
However, Cogeco Cable granted 84,250 stock options (71,233 in 2013) to these senior executives as senior
executives of Cogeco Cable during the 2014 fiscal year. During fiscal 2014, Cogeco Cable charged COGECO an
amount of $293,000 ($386,000 in 2013) with regards to Cogeco Cable’s options granted to these senior executives.
During fiscal 2014, Cogeco Cable also granted 12,550 (12,280 in 2013) ISUs to these senior executives as senior
executives of COGECO and charged COGECO an amount of $681,000 ($452,000 in 2013) in relation to the ISUs
granted to these senior executives.
Under the Management Agreement, Cogeco Cable pays monthly fees equal to 2% of its total revenue to the
Corporation for the above-mentioned services subject to a maximum amount which was set to $9.7 million in fiscal
2014 ($9.6 million in 2013) and paid within the first half of the fiscal year. The management fees are subject to annual
upward adjustment based on increases in the Consumer Price Index in Canada. This limit can be increased under
certain circumstances upon request to that effect by COGECO. In addition, Cogeco Cable reimburses the
Corporation's out-of-pocket expenses incurred with respect to services provided to Cogeco Cable under the
Management Agreement.
OTHER BUSINESS
Management knows of no matters which will come before the Meeting other than the matters referred to in the notice
of Meeting. If, however, other matters should properly come before the Meeting, the persons named in the enclosed
form of proxy will vote on these matters in accordance with their best judgment.
ADDITIONAL INFORMATION
The Corporation’s financial information is included in its audited consolidated financial statements and Management’s
Discussion and Analysis for the fiscal year ended August 31, 2014. Copies of these documents and additional
information concerning the Corporation can be found on the SEDAR web site at www.sedar.com and may also be
obtained upon request to the Secretary of the Corporation at its head office: 5 Place Ville-Marie, Suite 1700,
Montréal, Québec, H3B 0B3, telephone 514-764-4700. The Corporation may require the payment of a reasonable
charge if the request is made by a person or a corporation who is not a shareholder of the Corporation.
SHAREHOLDER FEEDBACK
The Board regards it as important to enable shareholders and other stakeholders to comment on subjects concerning
the Corporation, including its approval of executive compensation. Individual queries, comments or suggestions can
be made verbally, by e-mail at [email protected] or by mail c/o the Corporate Secretary’s Office of the
Corporation at 5 Place Ville-Marie, Suite 1700, Montréal, Québec, H3B 0B3. Shareholders’ comments, observations
from analysts, the press or the public are considered and, where appropriate, brought to the attention of and included
in the deliberations of the Board.
COGECO INC.
77
APPROVAL OF INFORMATION CIRCULAR
The contents and the sending of this Information Circular have been approved by the Board of Directors of the
Corporation.
th
Dated as at the 14 day of November, 2014.
Christian Jolivet,
Vice President, Corporate Affairs,
Chief Legal Officer and Secretary
COGECO INC.
78
SCHEDULE “A” – SHAREHOLDER PROPOSALS
The Mouvement d’éducation et de défense des actionnaires (MÉDAC), 82 Sherbrooke Street, West, Montréal,
Québec, H2X 1X3 submitted two proposals which are set out below (translated from French to English). MÉDAC has
been a shareholder of the Corporation since June 21, 2010, holding 100 subordinate shares as of August 31, 2014.
The Board of Directors’ response, including its voting recommendation, follows the proposals.
PROPOSAL A-1: Disclosure of Information on Director Qualifications
“It is proposed that more detailed information be disclosed in the proxy circular regarding the qualifications
of directors and their levels of continuing education.
In order to assist shareholders in evaluating the skills of all proposed directors, many companies use a table to
identify their main areas of expertise and experience. In addition, several of them describe the levels of education and
training achieved by such directors, so that shareholders can be satisfied that the directors update and refresh their
skills and knowledge of new developments in the areas of financial information, risk management, governance, ethics
and compensation policies. This level of detail is useful in helping shareholders to evaluate the qualifications of
director nominees. By way of example, we have included a director profile contained in the most recent proxy circular
of the Toronto-Dominion Bank:
David E. Kepler
Age: 61
Midland, MI
U.S.A.
Director Since:
December 2013
Independent
Mr. Kepler is the Executive Vice President, Business Services, Chief Sustainability Officer and
Chief Information Officer of The Dow Chemical Company, a chemical, plastics and advanced
materials manufacturer. Mr. Kepler holds an undergraduate degree in chemical engineering from
the University of California, Berkeley, and serves as a trustee for the Berkeley Foundation.
Mr. Kepler is also a member of the U.S. National Infrastructure Advisory Council.
Key Areas of Expertise/Experience
• Corporate Responsibility
• Senior Executive/Strategic Leadership
• Risk Management
• Technology
Other Public Company directorships in the past five years
• Teradata Corporation (2007 — present)
7)
Board/Committee Membership
Attendance
Board
Risk
N/A
Combined Total
Equity Ownership
Total of
Total Value
Common
of Common
Amount
Common
Shares and
Shares and
Exceeding/Below
2)
4)
Year
Shares
DSUs
DSUs
DSUs
SOR
2014
3,000
2,119
5,119
$256,232
($283,768)
These best practices are strongly encouraged by the Canadian Coalition for Good Governance.”
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE AGAINST PROPOSAL A-1
RESPONSE TO MÉDAC PROPOSAL
The MÉDAC Proposal requests that there be more detailed information disclosed in the Information Circular
regarding the nominees as Directors and that a table format be used to identify their main areas of expertise and
experience.
You will note that in the Information Circular for the Meeting, we have expanded the description of continuing
nominees to the Board by providing greater information on their past experience and matters such as responsibilities
taken on or committees served on in other public entities or non-profit organizations. In addition, under “Orientation
and Continuing Education”, we have added information as to continuing education for our Directors in matters such
as industry studies and benchmarking, technological developments and regulatory updates. Directors are also
informed of relevant courses or educational events relating to director responsibilities and the evolving area of
corporate governance.
COGECO INC.
79
A few entities with larger boards, such as certain Canadian-based Banks, do publish a skills matrix for their directors.
We have determined not to add a specific listing or table of areas of expertise for each of the eight nominees in the
Information Circular as many skills or expertise are not based on recognized accreditations or professional degrees
and involve much subjective interpretation. Nevertheless, our Board and Committees, in their assessment of Board
nominees and Board recruiting, do take into account the skills and expertise desired for the Corporation and those
that are seen to be available within the nominees and prospective Board members.
While this year’s Information Circular is substantially reflective of the thrust of the MÉDAC Proposal, we have
not adopted a table format for expertise and experience, for the reasons noted above, and accordingly the
Board of Directors recommends that shareholders vote AGAINST this Proposal.
PROPOSAL A-2: Director Skills: Gaps in the Areas of Social Responsibility and Environmental Matters
“It is proposed that the board of directors acquire as soon as possible a number of directors with expertise
in the areas of social responsibility and environmental matters.
In 2013, Cogeco published its second Corporate Social Responsibility Report setting out its achievements in these
areas in which it stated, among other things, that the company had "implemented key performance indicators in our
Canadian cable operations to measure our performance under the economic, social and environmental
dimensions...". It also showed the level of importance attached to the following issues by the various stakeholders:
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environmental: sustainability of products, energy efficiency and waste management;
social: corruption prevention, health and safety of employees and working conditions.
However, based on the profiles of the nominees for election as directors at the last annual meeting, it would seem
that none of the proposed directors had any general or specific expertise in the areas of social responsibility,
environmental matters or sustainable development. Let us consider the following question: would the criteria used to
appraise the performance of the executive officers be more non-financial in nature (environmental, social, etc.) if the
directors had specific expertise in these areas and saw the merits of a more general approach in appraising the
performance of the executive officers rather than one based strictly on financial measures?
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Wilson III
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Prichard
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Cope
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Farmer
Brochu
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Babiak
Leadership (a)
Other Board Experience (b)
Financial Services (c)
Accounting and Finance (d)
Investment Banking/Mergers & Acquisitions (e)
Risk Management (f)
Human Resources (g)
Corporate Responsibility/Sustainability (h)
Legal (i)
Strategic Planning (j)
Astley
It must be said that such skills are deemed sufficiently important by many companies to be included in their director
skills matrix, as shown by the following excerpt of the most recent proxy circular of the Bank of Montreal:
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The ability of Cogeco’s directors to consider these issues when called upon to make decisions in the long-term
interests of Cogeco is questionable. While Cogeco wishes to differentiate itself, among Canadian telecommunications
companies, for its social and environmental commitment, one may well wonder about the depth and consistency of
such commitment considering that the members of its main body have no specific expertise in the said areas.”
COGECO INC.
80
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE AGAINST PROPOSAL A-2
RESPONSE TO MÉDAC PROPOSAL
COGECO operates with a relatively small Board of Directors of eight members, in accordance with best practices.
The Board is cohesive, has accumulated good company and industry knowledge and functions very well together. At
this time, we are reluctant to increase the size of the Board.
Skills or expertise in the area of corporate social responsibility (“CSR”) or sustainable development matters are often
not based on recognized accreditations or professional degrees and involve much subjective interpretation. It is
notable that all of our Directors have extensive executive expertise directed to CSR matters such as sustainability of
products, energy efficiency and employee health and safety and working conditions. This positions them well in
overseeing CSR matters.
As described under “Corporate Social Responsibility”, COGECO has implemented a substantial CSR program aimed
at operating its business units responsibly and sustainably, which is overseen by the Board.
In this context, Cogeco Cable has received significant external recognition for its role in implementing the Policy so
that, for example, it obtained the BOMA BESt certification for its largest location in Trois-Rivières, Quebec. Such
certification recognizes its good environmental practices, including energy, waste and water management, pollution
control and environmental health and safety programs.
The CSR efforts of the Corporation and its business units have been noticed by external reviewers. Cogeco Cable is
now listed on the highly regarded Jantzi Social Index (JSI)® in the top quartile of its peer group. The JSI® consists of
60 Canadian companies that passed a set of broadly based environmental, social, and governance rating criteria.
Cogeco Cable was also named in Knights’ list of the Future 40 Responsible Corporate Leaders in Canada, where
it holds the 24th position, on the basis of its performance relative to 12 indicators measuring social and
environmental performance and corporate governance. These recognitions provide further incentive to continue to
perform in matters of corporate social responsibility, in order to reduce our overall environmental footprint and to
make a positive difference within and outside our organization.
We recognize the increasing attention on CSR and environmental concerns and the Board intends to bear this in
mind when assessing future potential candidates for the Board of Directors.
However, the Board’s view is that there is significant related experience in these areas within our existing
Board and it does not propose to add “as soon as possible a number of directors with specific expertise in
social responsibility and environment matters” as requested by MÉDAC and, accordingly, recommends that
shareholders vote AGAINST Proposal A-2.
COGECO INC.
81

NOTICE OF ANNUAL MEETING OF

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